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What to look for with transportation stocks

Jay Kaeppel
2026-10-07
The transportation sector has been a serious laggard in recent years. But one historical quirk suggests that it's time to put it back on the radar. Details herein.

Key points:

  • The transportation sector has been a significant laggard in the past year
  • This sector is now entering its most favorable seasonal period of the year
  • Traders should be alert for sector rotation into transportation stocks during the fourth quarter

Transports have been dead money...but that could change soon

The transportation sector has been a dreadful performer in the past year, both on an absolute and relative basis. The top clip below displays the performance of the iShares US Transportation ETF (IYT) in black and the SPDR S&P 500 Trust ETF (SPY) in blue. The bottom clip in the charts below depicts the performance of IYT relative to ticker SPY. The ratio has been in a virtually non-stop decline since late 2021, and just recently plunged to a new low.  What to look for with transportation stocks

Is this the moment to try to pick the bottom in this relationship? That's not necessarily the message. The primary message is that transportation stocks are entering what has generally been the most favorable seasonal period of the year.

The Annual Seasonal Trend chart for the iShares US Transportation ETF (IYT) highlights a period that extends from Trading Day of the Year (TDY) #190 through TDY #32 of the following year.

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