Do stocks really rally after midterm elections? We checked every one since 1950.

Every midterm season, the same chart makes the rounds: stocks tend to rally in the months after a midterm election, and some versions claim they have risen in the year after every single one in modern history. With the 2026 midterms on November 3, we wanted to know how much of that holds up.

So we checked all 19 midterm elections from 1950 to 2022, measured the stock market's return over the following 3, 6 and 12 months, and compared it with what the market does in a typical period of the same length.

How we tested it

• Every US midterm election from 1950 to 2022: 19 elections.
• The market: the S&P 500, from Robert Shiller's public long-run dataset. Headline figures are price returns, without dividends; we also computed total returns with dividends reinvested.
• Start point: the dataset is monthly, and each month's value is the average of that month's daily closes. So each test starts from the October average of the election year, the closest available point before the vote.
• Windows: to the January, April and following October averages, roughly 3, 6 and 12 months later.
• The comparison that matters: a strong average means little on its own if the market usually rises anyway. So we compared post-midterm returns with every 3-, 6- and 12-month window starting from each of the 865 months in the same period.

That last step is the one most midterm charts skip. Stocks go up in most 12-month periods, so "the market rose after every midterm" needs to be measured against how often it rises after any random date.

What we found

S&P 500 price returns, 1950 to 2022. With dividends reinvested, post-midterm years averaged +22.0% over 12 months, against +12.2% for all periods.

Post-midterm years didn't just beat a typical year; they did it with unusual consistency. Over 12 months the market rose after all 19 midterms, while a randomly chosen 12-month period rose only about three times in four.

The streak claim holds, with a footnote. On price returns, the S&P 500 was higher 12 months after every midterm from 1942 onward, 21 in a row. The last exception was 1938 (−1.2%), and before that 1930 (−42.8%), in the depths of the Depression. Counting dividends, the run goes back to 1934.

The worst and best years. The weakest 12 months came after 2010 (+3.0%), 1978 (+3.9%) and 2014 (+4.5%), so in several years the streak survived by a thin margin. The best was 1954 (+30.9%). Over 3 months the record is less clean: the market fell after the 1978 (−0.9%) and 2018 (−6.4%) midterms.

Why it might happen

Nobody can prove why, but three explanations come up most often:

• Uncertainty clears. Before a midterm, markets don't know which party will control Congress. Once the result is in, that uncertainty is gone, whichever way it went.
• Gridlock is predictable. Midterms often split power in Washington, which makes sweeping policy changes less likely. Some investors see that as a calmer backdrop.
• The second year of a presidential term has often been weak. Market slumps often fall in the year leading up to a midterm, so the following year starts from a lower base.

Why to be careful

• The sample is small. There have only been 19 midterms since 1950. A pattern across 19 data points can be coincidence, even a consistent one.
• Thin margins could flip. Our data uses monthly averages. Measured from exact closing prices, the closest years (2010, 1978, 2014) could look different.
• The windows overlap with everything else. Each post-midterm year also had its own recessions, rate changes and booms. The election is one event among many.
• Averages hide the spread. A few very strong years can carry the average. The median and the worst year give a more honest picture.
• Everyone already knows about it. A pattern this widely quoted may already be reflected in prices by the time the vote arrives.