TradingView data going back to 1950 cover 19 midterm elections. In every case, the index was higher 12 months after the end of October in the election year.
The average gain was 16.6%, and the median was 16.3%. Even the weakest run, from October 2014 to October 2015, delivered about 3%. The strongest, after the 1954 vote, topped 33%.
The short-term picture is messier.
From October to year-end, the S&P 500 rose in 13 of those 19 midterm years, with an average gain of 3.6%.
2018 shows the gap. The index slumped 7.6% in the last two months of that year, its worst post-midterm stretch in the sample.
Twelve months after the October close, however, it was up 12%.
Why Traders Start Watching This Week
Americans head to the polls on Election Day, Nov. 3, to elect all 435 House members and about a third of the Senate.
For a historical perspective, Dimitri Speck, founder and chief analyst at seasonal-research firm Seasonax, examined the narrower window around Election Day across 23 midterms since 1934.
From five trading days before the vote to two days after, the S&P 500 rose in 22 of 23 cases, with an average gain of 2.74%.
The only miss came in 1994.
Tuesday's close is the fifth trading session before Nov. 3. In other words, the window opens today.
Speck links the move to pre-election optimism. He said the rise "is clearly triggered by these elections, as evidenced by the high accuracy rate."
Bank of America Expects Strong Finish To 2026, But With a Caveat
Paul Ciana, technical strategist at Bank of America Global Research, sees midterm years as the soft spot of the four-year presidential cycle, at least until the fourth quarter.
Since 1940, the S&P 500 has averaged a 4.22% gain in midterm years, compared with 8.85% across all years, according to Ciana.
The fourth quarter flips that.
The index rose in 86% of midterm-year fourth quarters, by an average of 6.6%, against a 78% hit rate and a 3.87% average gain for all years.
Ciana summed up the S&P 500's midterm profile as "an underdog, but Santa rally outperforms."
He also flagged the exception that matters most for 2026, the second year of President Donald Trump's second term. In 2018, the second year of his first term, the S&P 500 ended the year down more than 6.5%, with no Santa rally.
Not Everyone Wants to Buy Before the Vote
The S&P 500 — as tracked by the State Street SPDR S&P 500 ETF (NYSE:SPY) — closed Monday at 7,676.77, up 11.6% this year and about 2.1% below its record high of 7,844.52.
Ed Yardeni, president at Yardeni Research, is in no rush.
He kept a 7,900 year-end target for the S&P 500, about 3% above Monday's close, and named an escalation of the Middle East war as their main concern.
He said they see some buying opportunities, but "better ones are likely after the November 3 midterm elections."
The likely outcome also matters for what comes next.
Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics, expects divided government to freeze fiscal policy, with President Trump vetoing Democratic spending plans and new tariffs becoming less likely. In his view, less fiscal support should slow growth and give the Federal Reserve room to start easing next summer.
On Polymarket, traders give Democrats a 91.5% chance of winning the House and a 65.5% chance of taking the Senate, the latter up 1 percentage point over the past week.
History offers a tailwind, not a guarantee. Nineteen midterms is a small sample, and 2018 showed how quickly the fourth quarter can break the pattern even when the following year rewards patient investors.
