The presidential cycle
2026 is a midterm year. Since 1928, the S&P 500 has averaged +5.55% from the end of September to the end of December in midterm years, rising in 83% of 24 cases, against +2.89% in all years.
| Year of cycle | Years | Average | Median | Up years |
|---|---|---|---|---|
| Post-election year | 25 | +7.02% | +9.06% | 60% |
| Midterm year | 24 | +3.33% | +0.58% | 54% |
| Pre-election year | 24 | +13.96% | +18.08% | 79% |
| Election year | 25 | +8.12% | +11.78% | 76% |
After a midterm-year September
Over the following 12 months the index averaged +17.09% and rose in 88% of 24 cases.
| Midterm year | Next 12 months |
|---|---|
| 2022 | +19.59% |
| 2018 | +2.15% |
| 2014 | -2.65% |
| 2010 | -0.86% |
| 2006 | +14.29% |
| 2002 | +22.16% |
| 1998 | +26.13% |
| 1994 | +26.30% |
| 1990 | +26.73% |
| 1986 | +39.13% |
| 1982 | +37.91% |
| 1978 | +6.61% |
| 1974 | +32.00% |
| 1970 | +16.65% |
| 1966 | +26.32% |
| 1962 | +27.42% |
| 1958 | +13.62% |
| 1954 | +35.16% |
| 1950 | +19.59% |
| 1946 | +1.00% |
| 1942 | +36.50% |
| 1938 | +4.49% |
| 1934 | +27.64% |
| 1930 | -47.77% |
Why it might happen, and why it might not
Explanations include policy uncertainty that peaks before the midterm vote and fades after it, and fiscal or monetary support ahead of the next presidential election. The pattern is widely followed, which can reduce its edge, and the sample is small: about two dozen cycles.
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