Evercore ISI: Tax-Loss Trades Could Set Up Stocks for a Year-End Rebound
Investor sentiment kicked off the week on a positive note, supported by renewed optimism over a potential U.S.–China trade deal, upbeat expectations for big tech earnings, a resilient U.S. economy, and hopes for another Federal Reserve rate cut on Wednesday. Together, these factors have pushed the S&P 500 toward its 35th record high of the year.
Yet, despite strong headline gains — the Russell 3000 is up about 15% in 2025, similar to the S&P 500 — nearly half of its components remain in the red year-to-date, according to Evercore ISI strategist Julian Emanuel. Historically, only about 35% of stocks would typically be down given such index strength.
Evercore’s data further reveals that while the Russell 3000 has rebounded 41% from its April 7 low, just 27% of its members are up more than 10% from that trough, and 16% are still trading below it. This underlines what Evercore calls the “market of stocks” dynamic — not all names are benefiting equally from the broader market’s momentum.
That uneven performance sets the stage for this year’s mutual fund tax-loss season, which wraps up on October 31. Tax-loss harvesting — selling losing positions to offset capital gains — can pressure underperforming stocks further in the short term, but history suggests it often leads to a rebound afterward.
According to Evercore, since 1990, the worst-performing quintile of Russell 3000 stocks from January through October has tended to outperform in November, rallying an average of 2.7% once the selling subsides.
In other words, beaten-down names could soon see a bounce — presenting an opportunity for traders looking for near-term upside.
Evercore screened the Russell 3000 for what it calls “Tax-Loss Tacticians” — stocks that have underperformed both the market and their year-to-date averages but still carry neutral-to-attractive ratings. Among the top 20 by market value are:
UnitedHealth (UNH), Accenture (ACN), Adobe (ADBE), Comcast (CMCSA), UPS (UPS), ONEOK (OKE), Target (TGT), Kraft Heinz (KHC), Kenvue (KVUE), General Mills (GIS), Constellation Brands (STZ), Lululemon Athletica (LULU), Gartner (IT), GoDaddy (GDDY), Centene (CNC), International Flavors & Fragrances (IFF), Dow (DOW), LyondellBasell (LYB), Deckers Outdoor (DECK), and DocuSign (DOCU).
For investors, these names may represent not just the season’s laggards — but its next potential leaders.
