Since 1874, the S&P 500 has risen in the 12 months after 32 of the last 38 midterm elections, gaining an average of 14 per cent, according to a Motley Fool analysis distributed by Stacker on 8 October 2026. The pattern is strong, but it is not a promise.
US voters go to the polls on Tuesday, 3 November 2026. Investors naturally ask whether to change anything. The historical record, from Capital Group, Ameriprise and Motley Fool, tends to show choppy markets before midterms and stronger returns after. This post explains what the data says, what it cannot say, and practical, non-political steps. It is general information, not investment advice, and past performance does not guarantee future results.
What History Says About Stocks Around Midterms
Midterm years have often been the weakest part of the four-year presidential cycle, with uncertainty and volatility building into November. Capital Group and others note that returns in the months before an election are often muted and that markets tend to improve afterwards, as uncertainty about the political balance clears.
| Source | Period | Finding |
|---|---|---|
| Motley Fool (via Stacker) | Since 1874, 38 midterms | S&P 500 up in the following 12 months 32 times; average gain about 14% |
| Ameriprise (S&P data) | Since 1950 | Average gain of 15.4% one year after a midterm election |
| Capital Group | 1930 to 2025 | Chart shows no negative one-year post-midterm return in its sample |
| Third year of presidential cycle | Long run | Often the strongest year of the four, per Berkshire Edge summary of market research |
Different sources use different start dates, data series and definitions, which is why the averages are not identical. The common thread is the direction, not the exact percentage.
Why These Patterns Are Not a Forecast
- Small sample: there are only a few dozen midterms, and each had a different economy, interest-rate setting and set of shocks.
- Correlation is not causation: a post-election rally may reflect the end of uncertainty, the economic cycle or something unrelated.
- Averages hide extremes: a 14% average includes years of large gains and years of losses in the months in between.
- Starting conditions matter: valuations, inflation and interest rates in 2026 differ from any previous year.
Capital Group itself says the post-election record does not mean the 12 months after 3 November 2026 are guaranteed to be profitable.
What Investors Can Do Instead of Guessing
| Habit | What to do | Why it helps |
|---|---|---|
| Rebalance | Bring your stock and bond mix back to target at a set date | Controls risk without forecasting |
| Diversify | Spread across sectors, regions and asset types | Reduces dependence on one outcome |
| Keep a cash buffer | Hold living costs for the near term outside stocks | Avoids forced selling in a dip |
| Automate contributions | Keep retirement and brokerage contributions on schedule | Buys through volatility |
| Limit headline checking | Review the portfolio on a calendar, not on news days | Cuts impulsive trades |
Elections can change tax, trade and spending policy, and sectors such as energy, health care and defence can react to expected changes. Treat any sector bet as a separate decision from the election itself, and consider speaking with a licensed adviser about your own situation.
A Note for Investors Outside the United States
US equities are a large part of global funds, so Indian and other international investors with US exposure may see swings through funds and ETFs. The same rules apply: match your holdings to your horizon and avoid trading on political predictions. If you invest through a rupee-based plan, consider currency effects as well.
A Simple Calendar for the Next Few Weeks
| Date | Event | Investor habit |
|---|---|---|
| Now to 2 November | Campaign season and polls | Avoid portfolio changes driven by headlines |
| Tuesday, 3 November | Election Day | Expect volatility; stay with your plan |
| Following days | Results and counts | Wait for clarity before acting on any forecast |
| Thursday, 26 November | Thanksgiving; markets closed | Use the pause to review goals |
| December | Year-end | Rebalance and review tax moves with an adviser |
Elections create noise, and noise tempts people to trade. A calendar like this turns the weeks into a checklist so your decisions follow your plan and not the news cycle.
