The midterm elections arrive on Tuesday, November 3, and the headlines about what they could mean for your portfolio are already everywhere. History does show some interesting patterns in how stocks behave around these elections. It is worth understanding them, and just as worth understanding why they are not a forecast.
Before the Midterms: Soft, Then Stronger
Midterm years have historically been among the choppier stretches of the four-year presidential cycle. Since 1930, the S&P 500 has averaged a total return of about 4.7% in midterm years, compared with 9.5% in other years. Since 1970, midterm years have also been more volatile.¹ Within the year, the pattern has often looked like this:
A slow start: Stocks have often gained little ground in the early months of a midterm year, until shortly before the election.¹
A soft late summer: From the end of August to early October, the median S&P 500 move in midterm years has been a decline of about 1.4%.² September has been the weakest month of the cycle, averaging a decline of about 0.8%.³
A stronger finish: Over the six months before a midterm election, stocks have gained an average of 4% and have risen 63% of the time. In the final month, the average gain was 1.5%, with gains 76% of the time.⁴ October has been the best month of midterm years since 1950, averaging a gain of 3% with positive returns about 74% of the time.³
After the Midterms: A Historical Tailwind
The period following a midterm election has historically been more favorable than the period leading up to it. Looking at 38 midterm elections since 1874, the S&P 500 produced the following average total returns after Election Day:⁴
Other studies use different start dates, indexes, and measurement windows, so their figures differ. Average 12-month returns after midterm elections have ranged from roughly 12% to 15% across the studies we reviewed, and each was higher than its comparison period.⁵ Note, too, that gains were not universal: six of the 38 twelve-month periods were negative.
Why It May Happen, and Why It May Not
Some market observers believe the pattern reflects relief once election uncertainty clears and the policy outlook becomes easier to read. That is a theory, not a proven cause.
Researchers who have tested the pattern statistically have not found it dependable. One study found no reliable midterm effect, and its results weakened when 1974, 2002, or 2022 was removed.⁶ Another found almost none of the patterns it examined to be statistically significant.⁷ Many of the weakest midterm periods also coincided with events that had little to do with elections, such as bear markets, high inflation, and rising interest rates. With only 38 elections to study, a few unusual years can move the averages.
What This Means for You
Politics is not a strategy. A portfolio built around your objectives, risk tolerance, and time horizon is designed to be adjusted when your personal situation changes, not because of an election or short-term market moves.
Timing is difficult. Stepping aside ahead of an election can mean missing gains if markets rise, and there is no reliable way to know in advance which way they will go.
Use the moment to revisit your plan. Election season is a reasonable time to confirm that your allocation, cash reserves, and withdrawal plans still fit your goals.
If you have questions about how your portfolio is positioned, please reach out. We are glad to talk it through.
Sources and Disclosures
Capital Group, via AdvisorAnalyst, February 5, 2026. Midterm-year returns: 1930–2025, as of January 15, 2026; volatility: since 1970.
UBS Global Research (19 midterm elections since 1950), as cited by Fortune, September 23, 2026.
Carson Group, data since 1950, as cited by Fortune, September 23, 2026.
Based on Robert Shiller's monthly S&P 500 data, as reported by The Motley Fool via The Garden Island, October 8, 2026. Total returns, not adjusted for inflation, measured from November monthly averages rather than Election Day closing prices.
U.S. Bank Asset Management Group Research (12.4%, 1900–2025); Oppenheimer Asset Management (13.9%, since 1948); Capital Group (15.4%, since 1950); Motley Fool (14%, since 1874).
Harvest Portfolios Group, July 2026.
The content is developed from sources believed to be providingaccurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Historical patterns are based on past market data and do not guarantee future results.Past performance does not guarantee future results. The S&P 500 is an unmanaged index that cannot be invested in directly; index returns do not reflect fees, expenses, or taxes. Averages can differ significantly from any individual period, and all investing involves risk, including the possible loss of principal. Asset allocation and diversification do not guarantee a profit or protect against loss. The opinions expressed and material provided are for general information and should not be considered a solicitation or recommendation to purchase or sell any security.