TradingView data show that the S&P 500 gained during the 12 months following October's close in all 19 midterm election years since 1950. TradingView's sample produced an average increase of 16.6%. The median increase was 16.3%. The weakest result was about 3%, between October 2014 and October 2015. The largest increase exceeded 33% after the 1954 election.
The shorter period from October through year-end produced less consistent results. The S&P 500 advanced in 13 of the 19 midterm years during that period, averaging a 3.6% gain. The index fell 7.6% during the final two months of 2018, the sample's worst result for that period. However, the index stood 12% higher 12 months after October's close that year.
Americans will vote on November 3 to choose all 435 members of the House of Representatives and about one-third of the Senate. Dimitri Speck, founder and chief analyst of seasonal-research company Seasonax, studied a shorter Election Day window across 23 midterms since 1934. Speck's study found that the S&P 500 gained in 22 cases from five trading days before the election through two trading days afterward, averaging 2.74%. The sole decline occurred in 1994. Tuesday's close marks the fifth trading session before November 3, so the window begins today. Speck attributes the gains to optimism before elections and argues that the high success rate demonstrates that elections cause the increases.
Bank of America expects a strong finish to 2026, subject to a historical caveat. Paul Ciana, technical strategist at Bank of America Global Research, regards midterm years as the weakest part of the four-year presidential cycle until the fourth quarter. Ciana's figures show that the S&P 500 has averaged a 4.22% gain in midterm years since 1940, versus 8.85% across all years. However, the index gained in 86% of midterm-year fourth quarters, averaging 6.6%, versus a 78% frequency and 3.87% average increase across all years. Ciana highlighted 2018 as a caution for 2026, the second year of President Donald Trump's second term. The S&P 500 lost more than 6.5% in 2018, the second year of Trump's first term, without a year-end rally.
The S&P 500, tracked by the State Street SPDR S&P 500 ETF (SPY), finished Monday at 7,676.77. The index has gained 11.6% this year. The index remains about 2.1% below the record level of 7,844.52. Yardeni Research President Ed Yardeni retained a year-end S&P 500 target of 7,900, about 3% above Monday's closing level. Yardeni identified an escalation of the Middle East war as the main concern. Yardeni said some buying opportunities exist, but better opportunities are likely after the November 3 midterm elections.
Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics, expects divided government to leave fiscal policy unchanged, with Trump vetoing Democratic spending proposals. Tombs also expects new tariffs to become less likely. Tombs believes reduced fiscal support should weaken growth and allow the Federal Reserve to begin easing next summer. Polymarket traders assign Democrats a 91.5% probability of winning the House. Polymarket traders assign Democrats a 65.5% probability of winning the Senate, an increase of 1 percentage point over the past week.
The historical results provide support for gains rather than a guarantee. The sample contains only 19 midterms. The 2018 experience demonstrates that fourth-quarter performance can diverge sharply from the pattern even when the subsequent 12 months produce gains.
S&P 500 Gains in 12 Months After Midterm Elections Since 1950
BenzingaShare
Summary
The fear and greed index showed mixed signals as historical data reveals the S&P 500 gained in all 19 midterm election years since 1950 over the 12 months following October, averaging 16.6%. Inflation data remains a key focus, with the index rising in 13 of 19 years from October through year-end, averaging 3.6%. Seasonax founder Dimitri Speck noted a 2.74% average gain in 22 of 23 midterms around the election window. Bank of America’s Paul Ciana added the S&P 500 has averaged a 4.22% gain in midterm years since 1940. The SPDR S&P 500 ETF (SPY) closed at 7,676.77, up 11.6% this year.
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