Midterm election years and the stock market: a historical look

Midterm election stock market history shows a recurring shape: the S&P 500 has tended to be choppy and prone to a mid-year drawdown in the year of the vote, then has risen in most of the 6 to 12 months afterwards. Averages differ by source, from about 12% to 16% for the six months after the vote, and the sample is small, so history describes patterns rather than promises.

Think of a midterm year like a stretch of unsettled weather in a familiar season. Forecasters can say that this time of year has often brought showers followed by clearer skies, but no single day is guaranteed to follow the average. Market history is similar: it gives context, not a timetable.

This guide is for information only. It reviews historical data and does not predict future prices or recommend any trade.

Key takeaways

• The year of a midterm election has often been among the weaker years of the four-year presidential cycle, with larger average drawdowns than other years.
• The months before the vote have tended to be softer than average. In the three years when the market fell before the vote, YCharts found the lows arrived in early to mid October.
• The sources reviewed here found that the S&P 500 was higher 12 months after most or all midterms since 1950, with average gains between about 12% and 17%, depending on the dataset.
• Party control appears to matter less than the economy and interest-rate backdrop, according to U.S. Bank. Some studies show differences by control, but they rest on few observations.
• Past performance does not guarantee future results, and a small sample can produce patterns that do not repeat.

Midterm election stock market history at a glance

Different research firms measure the same period in different ways, so their headline numbers do not match. The table gathers the main figures and the method behind each.

Two lessons stand out. First, the direction is consistent across sources: positive on average after the vote. Second, the size varies by several percentage points depending on the start date, the index and whether dividends are included.

Midterm election year stock market performance

The midterm year is the second year of a presidential term. It has a reputation as the weakest part of the cycle, and the data partly supports that.

The four-year cycle

The Stock Trader’s Almanac, cited by The Motley Fool, reports the average S&P 500 return by year of the presidential cycle from 1950 to 2023:

YCharts reports a similar picture using a different window: an average return of 2.8% in midterm calendar years since 1990, compared with 18% to 20% in years one and three. BlackRock, using Morningstar data, found an average annual return of 7.5% in midterm years against 12.4% in other years, measured on the S&P 500 from 1970 to January 2026.

Drawdowns are deeper in midterm years

GNG Research found the deepest decline within the year averaged 17.5% in midterm years, compared with 12.4% in other years. Carson Investment Research, cited by Bloomberg, puts the average peak-to-trough drawdown in midterm years at about 18%, the largest of the four years in the cycle.

The same GNG data adds a second half to the story: the gain from the midterm-year low to the following year’s high averaged 45.5%, against 35.7% in other years. A deeper fall has often been followed by a stronger recovery, but the fall comes first, and the sample is limited.

Midterm year stock market seasonality

Seasonality describes patterns that repeat at similar times of the calendar. In midterm years, GNG Research found a distinct quarterly rhythm:

In plain terms, the historical pattern has been a soft spring and summer, a low somewhere around autumn, then a recovery that carried into the following year. YCharts notes that in the three midterm years when the market was down before Election Day (1990, 2002 and 2022), the lows arrived between 9 and 12 October.

These are averages across several decades. Individual years vary widely, and a seasonal pattern is a description of the past, not a rule.

What a midterm stock market chart typically shows

A midterm stock market chart that overlays many midterm years usually looks like a shallow bowl. The line drifts or falls through the middle of the year, bottoms in the weeks around the election, and then climbs through the following year.

Several details shape that picture:

• The decline tends to arrive before the vote. U.S. Bank, using Bloomberg data, found an average 12-month return of 2.9% before midterm elections, against 8.9% across all years in its research.
• The recovery tends to start near the vote. Edward Jones and Stock Trader’s Almanac figures show gains in the month after the vote in most cases.
• The shape is an average, not a template. Some midterm years, such as 1998, were strongly positive before the vote, and others, such as 1974, fell sharply.

If you view such a chart, remember that averaging many years smooths away the volatility that traders experienced in each one.

The stock market before the midterm vote

Before the vote, the data is less encouraging.

• From August to Election Day. Schwab found an average S&P 500 return of just 1.7% from 1 August to Election Day in midterm years since 1974, a figure skewed by 1982, when the index rose more than 26%.
• The year before the vote. U.S. Bank’s analysis found the weakest 12-month periods before midterms in 1930 (-29.9%), 1974 (-31.8%), 2002 (-15.1%) and 2022 (-14.6%).
• Year to date at Election Day. YCharts reports an average gain of 2.3% from 1990 to 2026, with 7 of 10 midterm years positive. The three negative years were 1990 (-9.1%), 2002 (-19.2%) and 2022 (-18.6%).

BlackRock, by contrast, found that the market has on average rallied for about a month, or 22 trading days, before midterm elections since 1970. The sources define the window differently, which is part of why their conclusions differ.

How 2026 compares so far

Several analysts have tracked how the current midterm year compares with the historical template, and the readings depend on the date.

• Early October. YCharts reported a year-to-date gain of 14.6% as of 7 October 2026, against an average of +2.3% heading into Election Day since 1990. It also noted that 1998 had the best pre-election year-to-date result at +15.9%.
• Late March. Bloomberg, citing market data, reported that the S&P 500 fell as much as 9.1% in late March 2026 and has since added about USD 11 trillion in market value.
• Through 2 November. GNG Research reported the index up 10.2% for the year, with a maximum drawdown of 9.1%. The average midterm year was up 1.3% at the same point and closed the year up 4.6% on average.
• Strong starts. BlackRock noted that the 13.1% gain through August 2026 was the sixth-best start to a midterm year since 1926.

GNG Research also looked at the seven midterms since 1950 in which the S&P 500 was already up 10% or more by Election Day. The next 12 months averaged +15.7%, and all seven closed higher. The author calls this a very small sample, which is the right way to read it. A strong year so far does not tell you what the next 12 months will bring, and the correlation GNG found between pre-election and post-election returns was close to zero.

The stock market after the midterm vote

After the vote, the data is more consistent. GNG Research measured returns from Election Day across several horizons for the 19 midterms from 1950 to 2022:

The 12-month range was from +1.1% (1986) to +33.2% (1954), with a median of +14.5%. U.S. Bank, using a much longer window of 31 midterms from 1900 to 2025 that includes the Depression-era years, found a lower average of 12.4%, and 17.5% when restricted to the period since 1980.

Why a longer record changes the answer

The longer record shows that “higher after every midterm” is not a universal law. According to GNG Research, the market was down 12 months after the 1930 and 1938 midterms, and the 1946 result was about flat (+0.1%). The near-perfect record applies from 1950 onwards.

The first month after the vote

The first month is the least reliable part of the pattern. Stock Trader’s Almanac data cited by Bloomberg shows a gain of about 1.6% on average, with the index higher about 79% of the time. In 2018, for example, the S&P 500 rose 2.1% the day after the election, then was 2.2% lower a month later.

Does party control matter for the stock market?

Investors often ask whether the result, rather than the timing, matters. The evidence is mixed.

The studies point in different directions, and the more rigorous test, from U.S. Bank, found no significant difference. Bloomberg quotes RBC’s Lori Calvasina saying that the record for divided government “is not as good,” which shows analysts disagree.

Discover how US midterm elections affect the stock markets.

Case studies from past midterm years

Three episodes show why the averages hide wide variation.

2002. The market fell 7.8% in the first three months after the vote, according to GNG Research, yet was up 14.9% a year later. The year before the election was a 15.1% decline, per U.S. Bank.

2018. The S&P 500 fell 14.7% from Election Day to Christmas Eve but was up 11.7% a year later, according to GNG Research. Bloomberg notes that the index lost 6.2% for the year after the Federal Reserve raised rates four times. BlackRock’s total return figure for 2018 is -4.4%.

2022. The 12 months before the vote were a 14.6% decline, according to U.S. Bank, and BlackRock reports a total return of -18.1% for the year. Other factors beyond the election also weighed on markets that year.

In each case, other factors, including the economy and monetary policy, also mattered.

Why these patterns might exist

Researchers offer several explanations. None is proven.

• Uncertainty clears. Stock Trader’s Almanac editor Jeffrey Hirsch, cited by Bloomberg, suggests that part of the post-election rally may reflect the removal of election uncertainty.
• Gridlock can be predictable. FHN Financial’s Chris Low, quoted by CBS News, argued that less legislative change makes a more predictable environment for company investment.
• The economy dominates. U.S. Bank concludes that economic conditions, not elections, explain most of the swings, and that midterm returns need economic context.
• Policy limits. UBS analysts, quoted by CBS News, note that lawmakers remain limited in what they can do because the president can veto legislation.

Morgan Stanley Research makes a related point: equity markets have generally shown limited reaction to midterms, and bond markets have been driven more by Federal Reserve policy than by shifts in Congress.

The limits of the data

Read the numbers with care.

1. Small samples. Even the long record contains only 19 post-war midterms. A handful of unusual years can move an average.
2. Different methods. Price return excludes dividends, and total return includes them. Start dates, end dates and index definitions differ.
3. Weak predictive link. GNG Research found a correlation of -0.10 between pre-election returns and the following 12 months across 19 midterms, which is close to no relationship.
4. Data inconsistencies. Some published summaries mix sample sizes, which is why this guide cites methods alongside each figure.
5. No guarantee. Past performance does not guarantee future results, and any given year can break the pattern.

How to read a midterm study

Headlines about midterm history can sound more certain than the data allows. A few habits help you judge any study you come across.

• Check the start date. A study beginning in 1950 excludes the weak post-election years of the 1930s and 1940s, and one beginning in 1990 contains only a handful of midterms.
• Check the measure. Price return and total return differ by the dividends paid, and a calendar-year figure differs from a 12-month window that starts on Election Day.
• Look beyond the average. A win rate and a range say more than a mean. In GNG Research’s data, the 12-month result after midterms ranged from +1.1% to +33.2%.
• Ask what else was happening. U.S. Bank stresses that economic conditions move markets more than elections do, so a strong or weak year may owe more to the economy or interest rates than to the vote.
• Note who is speaking. Studies from asset managers, data vendors and independent researchers can reach different conclusions from the same history.

What this history means for traders

The data is useful context, not a signal. The points below are general education about risk, not a recommendation.

Treat averages as ranges

An average gain of 15% over 12 months does not mean any single year will deliver it. The 12-month figures ranged from 1.1% to 33.2% in GNG Research’s data, and earlier decades included losses.

Expect volatility around the vote

The deepest declines in midterm years have often arrived before the election, and the low has sometimes come in the weeks around it. Our guide to the volatility index explained shows how traders measure market fear.

Understand leverage

Contract for difference (CFD) trading lets you speculate on price movements without owning the asset. Leverage magnifies gains and losses and can lead to losses greater than your deposit, so position size and exit levels deserve planning before an event, not during it.

Know the election mechanics

Understanding the calendar helps you anticipate when news arrives. Our overview of when the next US election is and how the process works covers the sequence, and the guide on what the US midterm elections are explains what is at stake.

Write a plan before the event

A written plan removes guesswork when prices move quickly. Useful items to settle in advance include:

• the maximum share of your account you are willing to risk on one position;
• the price levels at which you would close a trade, and the fact that a stop-loss order is not guaranteed to fill at the level you set when prices gap;
• the trading costs you expect, including spreads that may widen in fast markets and any overnight financing charges;
• the scheduled events nearby, such as data releases and central bank meetings, that could move markets on the same day;
• how you will review the trade afterwards, so each event teaches you something for the next one.

Practise first

A demo account lets you test your approach with virtual funds. Demo results do not guarantee live results, but it is a low-cost way to learn how your platform behaves in fast markets.

Final verdict

Midterm election stock market history points to a consistent shape: a choppy midterm year with a softer stretch before the vote, and a higher index in most of the 6 to 12 months afterwards. Averages differ by source and method, and each study rests on a small number of midterms, so the pattern describes what happened and does not promise what will happen next.

Two further points belong in the verdict. Party control has not been a reliable guide, with studies finding little statistically meaningful difference. The wider economy, inflation, interest rates and earnings have often outweighed the political calendar. History is best used as context for planning: knowing that choppy periods have been common helps a trader prepare for wider swings, but it cannot say how any single midterm will unfold. Leverage magnifies losses as well as gains, and nothing here is a recommendation.

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Frequently asked questions

How does the stock market usually perform after midterm elections?

Historically, the S&P 500 has tended to rise in the months after midterms. GNG Research found an average gain of 14.1% over six months and 15.1% over 12 months for the 19 midterms from 1950 to 2022, with a higher market after all 19. Averages vary by source, and past performance does not guarantee future results.

Is the midterm year bad for stocks?

The midterm year has often been weaker than other years in the presidential cycle. The Stock Trader’s Almanac reports an average S&P 500 return of 4.6% in year two of the cycle since 1950, and GNG Research found deeper average drawdowns in midterm years (17.5%, against 12.4% in other years).

Does it matter which party wins the midterms?

The evidence is mixed. Carson Investment Research and BlackRock report differences by political control, but U.S. Bank found no statistically significant difference in three-month returns between one-party and mixed control. Economic conditions and interest rates appear to matter more.

When does the market usually bottom in a midterm year?

In the years when the market fell before Election Day (1990, 2002 and 2022), YCharts reports that the lows arrived between 9 and 12 October. This is a small set of years and does not describe every midterm.

Can I rely on midterm history to trade?

No. The samples are small, the methods differ, and GNG Research found almost no correlation between pre-election and post-election returns. Treat the history as background and manage risk with a plan, especially if you use leverage.

Sources

• U.S. Bank, How midterm elections affect the stock market
• GNG Research, How the post-midterms market historically behaves
• Bloomberg via WealthManagement.com, Stock market gains are weakest after midterm results like these, 4 November 2026
• BlackRock, Midterm elections and stock market trends
• Charles Schwab, What the 2026 midterms could mean for the markets
• YCharts, 2026 midterm election: how do markets historically respond?, 15 October 2026
• CBS News, How Wall Street analysts think the midterms could affect the stock market
• The Motley Fool, This is how the stock market typically performs after midterm elections, 4 November 2026
• Morgan Stanley Research, Midterm elections: more noise than change?, 22 July 2026

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