Midterm Elections and the Stock Market: What 19 Elections Since 1950 Say About November 3, 2026

Election Day is Tuesday, November 3, 2026, four weeks from today. Every midterm since 1950 has been followed by a higher S&P 500 twelve months later, 19 for 19, with a median gain of 14.5%. That is the headline every brokerage is repeating this week. The part they leave out is that 2026 has not followed the midterm-year script at all, and that changes how useful the history is.

We computed every number in this article ourselves from daily S&P 500 closing prices, 1949 through October 6, 2026, rather than quoting someone else's chart. The method is at the bottom so you can check it.

What the midterm elections are, and when

Midterm elections happen two years into a presidential term. On November 3, 2026 every seat in the House of Representatives and 33 seats in the Senate are on the ballot, plus a handful of special elections and 36 governorships. The president is not on the ballot, which is exactly why markets care: midterms usually cost the president's party seats, and the result decides whether the next two years bring new legislation or gridlock.

The timing matters for traders this year because the Federal Reserve meets October 27 and 28, six days before the vote, and the third-quarter earnings season runs straight through both events.

How do midterm elections affect the stock market? The 19-election record

Here is what the S&P 500 did around each of the 19 midterm elections from 1950 to 2022. Election day means the closing price on the day of the vote.

• Twelve months after election day: higher every time, 19 of 19. Mean gain 15.1%, median 14.5%. The weakest year was 1986 at 1.1%, the strongest 1954 at 33.2%. The three most recent: 2014 up 4.5%, 2018 up 11.7%, 2022 up 14.5%.
• The three months after election day: higher 17 of 19 times, median gain 7.7%. The two exceptions were 2002 and 2018, both years when a bear market or a December sell-off was already under way.
• The month before the vote (September 30 to election day): higher 14 of 19 times, median gain 3.5%. The two clear losers were 1978 (down 8.5%) and 2018 (down 5.4%), both years when October fell hard.
• The pre-election drawdown: this is the number nobody quotes. From January 1 to election day, the median midterm year saw a peak-to-trough drop of 16.0%, and the mean was 17.0%. In 1974 it was 37.6%, in 2002 33.8%, in 2022 25.4%. Only three midterm years since 1950 (1954, 1958 and 2014) got to election day with a drawdown under 8%.

Put those together and you get the real midterm pattern: a rough first ten months, a bottom somewhere around September or October, then a strong run that lasts about a year. The post-election rally is less a reward for the election result than a rebound from the drawdown that preceded it.

Is the midterm effect real, or just the stock market going up?

Any twelve-month window since 1950 has been positive about 75% of the time, with a median gain of 10.6%. The post-midterm window is positive 100% of the time with a median of 14.5%. So the effect is real, but it is worth roughly four extra percentage points and a better hit rate, not a different market. Nineteen observations is also a small sample. If you flipped a coin weighted 75% heads nineteen times, nineteen heads in a row would be rare (under half a percent), which is why the streak gets attention, but it is not proof that November 2026 is safe.

The usual explanation is uncertainty. Markets dislike not knowing who writes the tax and spending bills, and once the votes are counted that question is answered for two years, whatever the answer. Morgan Stanley's strategists add that under a Republican president, the strongest average post-midterm return came when Congress ended up split between the parties, about 23% (their 2026 note). Treat that as one firm's cut of a small sample, not a forecast.

Why 2026 is not a normal midterm year

This is where the history stops being a template. Through October 6, 2026 the S&P 500 is up 14.1% for the year and closed today at a record 7,826. Its worst drawdown of the year was 9.1%. In the 19 prior midterm years, the median drawdown before election day was 16%. Only 2014 came close to this calm, and 2014 went on to gain just 4.5% in the twelve months after the vote, the second weakest result in the series.

In other words, the dip that the post-midterm rally usually recovers from has not happened. A market at a record high four weeks before the vote has less pent-up rebound in it than a market 20% off its high. That does not mean stocks must fall. It means the 19-for-19 statistic was built on a setup that does not match this one, so leaning on it as a reason to add risk in November is weaker than it looks.

Add the rest of the 2026 backdrop: the Fed raised rates in September for the first time since 2023, the ten-year Treasury yield sits above 5%, and the Fed meets again a week before the election with another hike on the table. None of the 19 prior midterms happened with the Fed hiking into the vote from a record-high stock market. 1994 and 2018 came closest, and both had a weak stretch into year end before recovering.

What history says about October in a midterm year

October has a reputation as the dangerous month, and in midterm years it has earned part of it. October 1978 fell 9.2% and October 2018 fell 6.9%, both in the run-up to the vote. But October is also where midterm-year bottoms get set: 1966, 1974, 1990, 2002 and 2022 all made their low for the year in the first half of October, four to five weeks before election day, and October 1974 then gained 16.3%. The month is volatile in both directions, which is a different thing from being bad. We covered the broader seasonal record in is October bad for stocks and the day-by-day schedule in the October 2026 market calendar.

How a rules-based trader handles the four weeks before an election

Election history is useful for one thing: setting expectations about volatility, so that your rules are set before the noise starts rather than changed in the middle of it. Four habits that follow from the data above:

• Size positions for the drawdown you have not had yet. The median midterm year dropped 16% at some point before the vote; 2026 has only dropped 9%. If a 16% market drop would force you to sell, your position sizes are too large for the season, record high or not.
• Decide your exits now. Election nights and Fed days produce gaps. A stop-loss that is already in place acts on the price; a stop you plan to place after you see the result acts on your mood. The first one is a rule, the second is a hope.
• Do not trade the result. The 19-for-19 record did not depend on which party won. Republican sweeps, Democratic sweeps and split outcomes all appear in the winning years. A strategy that needs a particular election result is a bet on politics, not a trading rule, and there is no way to backtest it on nineteen data points.
• Expect the first hour to be worse than usual. Volatility clusters at the open on news days, and election week will have several of them. If your rules allow it, letting the first 60 minutes pass before new entries is one of the cheaper risk reductions available.

If you would rather have rules like these enforced for you, with a stop on every position and no new buys in the first hour, that is what JorgAI does in the brokerage account you already have. You can set up your own rules in a few minutes and change them before election week, not during it.

Quick answers

When are the 2026 midterm elections? Tuesday, November 3, 2026. Every House seat and 33 Senate seats are on the ballot.

What does the stock market usually do after midterm elections? Since 1950 the S&P 500 has been higher twelve months after every midterm, 19 of 19, with a median gain of 14.5% and a weakest result of 1.1% in 1986.

Is the stock market usually down before midterms? Usually choppy rather than down outright. The month before the vote has been positive 14 of 19 times, but the typical midterm year suffered a 16% peak-to-trough drop at some point before election day.

Does it matter which party wins? Not in the twelve-month record. Gains followed every combination of outcomes. One brokerage study found the strongest average under a Republican president came with a split Congress, on a sample too small to trade.

Why might 2026 be different? The index is at a record high four weeks before the vote with only a 9% drawdown this year, the Fed is raising rates, and the ten-year yield is above 5%. The usual post-midterm rebound started from a drawdown that has not happened this time.

How we calculated this

Daily S&P 500 closing prices from January 3, 1949 through October 6, 2026 (Yahoo Finance, ^GSPC). Election day is the first Tuesday after the first Monday in November; where markets were closed we used the last close before. Twelve-month returns run from the election-day close to the last close on or before the same date a year later. Drawdowns are peak-to-trough on closing prices from the first trading day of the year through election day. The baseline uses every twelve-month window starting on a monthly grid from 1950 to October 2025. Price returns only, dividends excluded, which is how the widely quoted 19-for-19 figure is also measured.

This article is education, not investment advice. Past patterns do not predict future returns, and nineteen elections is a small sample.