Plotting all 35 midterm-election years for the DJIA since 1886, the spread of outcomes is enormous: In difficult midterm years, the DJIA has fallen by as much as 25% (1966), while in stronger years it has gained up to 45%. The average of ±2% is likely the most realistic expectation right now, given the current environment.
Chart 1: DJIA 2026 versus the Top Three Midterm Correlated Years:
1898 = approx. +20% (correlation 0.764); 1926 = ended the year flat (0.716); 1966 = approx. -20% (0.826).
However, to get a sharper view, the three midterm years with the highest correlation to 2026 DJIA performance (from January through last week) were selected and charted: 1966, 1926, and 1898 (Chart 1).
- 1966 has the strongest correlation (0.826).
- 1898 (0.764) is the bullish outlier: if 2026 follows that path, the market could go bazooka from here.
- 1926 (0.716) sits in the middle, and curiously, its path aligns with the average of the top three.
Chart 2: DJIA 2026 vs 1966 and Top Three Composites. In 1966, the DJIA printed its yearly low in early October.
Each of these years carries its own resonance:
- In 1898, the US was just emerging as a global power through victory in the Spanish-American War.
- In 1926, an industrial revolution was reshaping the economy.
- In 1966, tariffs, war, inflation, and a punishing midterm election defined the landscape.
See also: