You can’t deny it! Historically, U.S. stocks tend to decline before midterm elections—so what happens after? ┈➤ Stocks likely decline before midterm elections Over the past 30 years, including this year, there have been eight midterm elections. Only in 2014 did U.S. stocks not decline before the election—but the Nasdaq 100 still saw a sharp intramonth dip in October. In 1998, the market pulled back during an overall uptrend; In 2002, it hit a bottom; In 2006, stocks fell six months before the election, then rebounded three months prior; In 2010, the same pattern occurred—decline followed by a rebound three months before the election; In 2018, stocks fell for three consecutive months before the election; In 2022, another bottom formed. While the overall U.S. stock market trend over the past 30 years has been upward, major declines or significant corrections have most often occurred near midterm elections. So, is today’s market decline driven by midterm election fears—or the bursting of the AI bubble? ┈➤ What happens after midterm elections? In 1998, neither chamber changed control—stocks surged immediately. In 2006, control of both chambers flipped—stocks entered a 4–5 month consolidation period (during which the S&P 500 first rose modestly), then resumed an uptrend. In the other five cases, only one chamber changed control. Except for 2010, stocks typically corrected for two to three months after the election before rising again. ┈➤ What about this year? Unless a miracle occurs, the House of Representatives will almost certainly remain under Democratic control. The Senate is also likely to stay under Democratic control, though the outcome remains uncertain—since only one-third of Senate seats are up for election, while all House seats are contested. If Republicans retain the Senate but lose the House, it would mirror the 2018 midterm outcome—after which stocks fell for two months. Conversely, if Republicans lose both chambers, it would resemble 2006—when stocks consolidated for roughly four months afterward. Of course, this is applying past patterns rigidly—but one thing is clear: Republicans are likely to lose at least the House. Therefore, after this year’s election, a sharp market rally is unlikely. Overall, Feng Brother believes market conditions will gradually improve starting in Q2 next year—but not necessarily before then. The bearish scenario: another two months of declines. The bullish scenario: a period of consolidation. As for crypto—don’t rely on historical parallels. In 2018, it was the BCH hash war; in 2022, it was the FTX collapse—neither had anything to do with midterm elections. Unless a major liquidity black swan emerges, BTC may decline slightly—but won’t experience an extreme crash.