History Says Post-Midterm Stocks Have Never Fallen
By @sharedot · · 6 pages
- Finance
- Stock Market
- Midterm Elections
- S P 500
Motley Fool analysis finds the S&P 500 has posted positive 12-month gains after every midterm since 1950, averaging 16.6% per cycle.
A perfect historical record heading into Tuesday
With midterm elections days away, The Motley Fool reports that investors buying the S&P 500 at the end of October in a midterm year have enjoyed positive 12-month returns 100% of the time since 1950.
The average gain is 16.6%, with a median of 16.3%, ranging from a low of 3% in 2014 to a high of 33.6% in 1954. Even over the shorter October-to-year-end window, the average return has been positive at 3.6%, though only 13 of 19 midterm years were positive.
The analyst argues the recent sell-off — driven by tech weakness, inflation and election uncertainty — may be a buying opportunity.
Why the pattern works: markets hate uncertainty
The mechanism behind the record, per the analysis, is that midterm uncertainty gets resolved one way or another, and markets often decline into the vote, setting up a bounce.
A USA Today report on Morningstar research points the same direction: since 1926, stocks have risen an average of 2.4% in election-year Novembers versus 0.9% in non-election-year Novembers.
"It seems like there is such a thing as a post-election pop," said Dan Lefkovitz, a strategist for Morningstar Indexes. November is also a strong month generally, aided by holiday-season consumer spending.
Two firms split on divided government
One conventional assumption is challenged by the data. The Motley Fool notes markets historically favor divided government because it blocks major new policy, giving businesses visibility.
But Morningstar's century of data, cited by USA Today, found stocks actually performed better under unified government — 1.2% a month versus 0.7% under divided government — though they performed well in both.
Meanwhile, USA Today reports that Fidelity finds the S&P gained just 4.9% in the 12 months before midterms since 1950 but 14.5% in the 12 months after, and that the S&P is up roughly 12% in 2026 as of Oct. 29.
Risks to the record — and what comes next
The Motley Fool cautions the streak could break: the AI boom's fate likely outweighs any technical pattern, and the two midterms near the dot-com bust fell in 1998 and 2002, not at the 2000 peak.
It also flags political backlash against data center construction, including potential restrictions that could derail the build-out.
On election chaos, USA Today quotes Motley Fool analyst Lou Whiteman: if results are questioned, "there could be an outsized stock market reaction" — and the best response is to do nothing and stay bullish.