The S&P 500 dodged what is usually considered the weakest part of the four-year presidential cycle.

According to Jeff Hirsch, editor of the Stock Trader's Almanac, "market weakness has been modest and seasonally normal, and stocks are now entering the historically favorable Sweet Spot of the Four-Year Cycle, extending from Q4 of the midterm year through Q2 of the pre-election year."

What Is The Four-Year Cycle?

The idea is simple. U.S. Presidential administrations tend to push difficult policy early in a term. Later, they lean toward growth-friendly measures before voters return to the polls.

As a result, the midterm year has historically been the weakest. The following pre-election year has historically been the strongest.

The weak spot runs from the second quarter through the third quarter of the midterm year. Over that stretch:

• The Dow Jones Industrial Average has averaged a 2.0% decline
• The S&P 500 has averaged a 2.5% loss and
• The Nasdaq a 6.6% drop.

The sweet spot runs from the fourth quarter of the midterm year through the second quarter of the pre-election year. Over those nine months:

• The Dow has averaged a 19.3% gain
• The S&P 500: 20.2%
• The Nasdaq: 29.4%.

The Dow and S&P 500 figures cover 1949 through Sept. 8, 2026. The Nasdaq figures start in 1971.

"We are only a few days away from the most bullish part of the 4-year Presidential cycle. Will this time be different?," said Carson Investment Research analyst Ryan Detrick in a post on X.

"This quarter, and the next two, are the three strongest out of the entire four-year presidential cycle," he added.

This Year's Decline Came Early…

The S&P 500 closed 2025 at 6,845.49. It then slid to a closing low of 6,343.73 on March 30, a 7.3% year-to-date drop at that point.

From there, the index rallied through the stretch that is usually the weakest. Whether the so-called "sweet spot" is already priced in remains to be seen. In a typical midterm year, the sweet spot begins from a depressed low.

The deep summer drawdown creates the base for the rebound. This year, stocks enter the window near their highs instead.

However, Hirsch's framing suggests a strong starting point doesn't cancel the pattern.

Investors tracking the broad market can follow the pattern through the SPDR S&P 500 ETF Trust (NYSE: SPY), the SPDR Dow Jones Industrial Average ETF (NYSE: DIA) and the Invesco QQQ Trust, Series 1 (NASDAQ: QQQ).