Buying the S&P 500 on US midterm election day and holding until June 30 of the following year has produced positive returns in every instance since 1942, averaging roughly +16% with a range of about +2.5% to +30.8% across all cycles, regardless of which party controlled the White House, Senate, or House.
» If you bought on Midterm Election Day, held through June 30th of
the following year the S&P 500 was higher EVERY. SINGLE. TIME. «
the following year the S&P 500 was higher EVERY. SINGLE. TIME. «
Midterm years themselves typically deliver the weakest average returns (~4–5%) and highest volatility/drawdowns in the four-year presidential cycle, with weakness often concentrated in Q3/Q4 ahead of November; the rebound usually begins in late Q4.
Nevertheless, cycle
rankings place Year 3 (the post-midterm/pre-election year) as the
historical "sweet spot," typically outperforming Year 1 (~4–7%), Year
2/midterm (~3–5%, weakest), and Year 4/election (~6–8%), with average
gains often cited in the 10–17% range as incumbents frequently pursue
pro-growth policies.
DJIA Four-Year Presidential Cycle.
Average S&P 500 total-return path (indexed to 100 on midterm Election Day) for all midterm years since 1970 (1970–2022), spanning roughly ±6 months. X-axis centers on Election Day (first Tuesday in November); y-axis tracks cumulative total return. The average line rises in the final ~22 trading days before the election (= October 2, 2026) and continues higher afterward (+14.1% average in the following six months). A separate “Lost Control” series (party loses presidential trifecta) lags the broader average post-election (+10.4% vs. +16.1%)
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