Midterm Election Stock Market Seasonality: 30 Years of Data

The US holds its midterm elections on November 3, 2026, so it’s a good time to ask a simple question: does the stock market behave differently in midterm years? We tested it with 30 years of adjusted SPY prices, 1996 to 2025, covering seven midterm years from 1998 to 2022. The short answer: midterm years have been the weakest of the four-year cycle, with deeper drops, and the strength has tended to come later. This looks only at the calendar, not at which party won.

Midterm years: the weakest of the presidential cycle

The gap between the midterm average (+4.10%) and median (+13.46%) tells the story: midterm years have tended to go either quite well or quite badly. They included +28.7% in 1998, but also −21.6% in 2002 and −18.2% in 2022.

The average midterm-year path

The two averages separate in spring and stay apart. From January 1 to September 30, SPY averaged −2.10% in midterm years, against +8.02% in other years. From there, midterm years gained some ground: +6.61% from September 30 to December 31, rising in 6 of 7, against +5.18% otherwise.

Stock market seasonality by month in midterm years

April through June stands out: all three months averaged negative in midterm years, and all three positive otherwise. October and November are the strongest, each up in 6 of 7. December has been weak, up in just 3 of 7. With only seven years behind each number, a single bad month moves these averages a lot.

Bigger drops, then what followed each election

The median midterm year saw a peak-to-trough fall of −19.0%, against −10.3% in other years. Three of the seven drops bottomed in October, though 2018’s came after the election, on December 24.

The stock market after midterm elections

Three points stand out. First, there has been no reliable post-election pop: the rest of the year averaged less than in other years, and SPY fell 8.6% from Election Day to year-end in 2018. Second, the six months from October 31 to April 30 rose every time, with a worst result of +4.40%. Third, SPY was higher a year after all seven elections, with a worst result of +5.84%.

That last result needs context. The median 12-month return was almost identical: +13.84% after midterms and +13.85% in other years. So the difference isn’t a bigger typical gain. It’s that the bad outcomes didn’t happen in these seven cases, while the other group’s worst was −38.98%.

Sector ETFs after midterm elections

Most SPDR sector ETFs launched in late 1998, so this covers the six midterms from 2002 to 2022, for the October 31 to April 30 window:

Materials, technology, industrials, consumer discretionary and health care rose in all six. Energy and health care actually averaged less than in other years. Six observations are far too few to rank sectors with confidence, so treat this as context. Each sector’s full record is on the sector seasonality pages.

Where 2026 stands

This year doesn’t fit the midterm pattern so far. Through early November, SPY is up about +11.3%, against an average of +1.2% for midterm years and +10.2% for other years at the same date. Its largest fall was about −8.9%, far smaller than the median midterm drop, and its low came on March 30. Some of the historical strength was a rebound from a deep drop, and that setup isn’t in place this year.

Why might midterm years behave this way?

A common explanation is uncertainty: markets may be cautious before an election about the future balance of power, then more comfortable once it’s settled. That’s plausible, but this data can’t prove it. Several of these years were driven by much bigger forces, such as the bursting of the dot-com bubble in 2002 and interest rate rises in 2022.

See also SPY seasonality by month, the Santa Claus rally, tested, and the best seasonal stocks for November.

Past seasonal performance does not guarantee future results. Win rates and average returns are historical base rates, not predictions. This is for informational purposes only and is not financial advice.