Stock Market โคHistorically Shrugs Off Midterm election Years, Dataโฃ Shows
LONDON, Nov. 28,โ 2025 – As the 2026 midtermโข elections draw closer,โ historical stockโ market performance during similar periods offers a perhaps โขreassuring signal for investors: stocks โขhave tended to deliver positive returns in โthe year of a midterm election, with anโฃ average gain โคof over 17% dating back toโค 1926. This โขtrend, identified through a โฃcentury of market data, suggests that political uncertainty surrounding the elections may not necessarily translate into market downturns.
The โขanalysis,conducted by MarketWatch,reveals a pattern of investor resilience during midterm election years. While short-term volatility can occur around the actual election date, the overall annual performance has consistently favored gains.This historical behavior impacts a broad range of investors,โ from individual retirement savers to large institutional funds, and offers a potential framework for navigating โthe upcoming political landscape. Jamie Chisholm, a markets reporter for MarketWatch, notes that understanding these historical trends can provide valuable context, โฃthough past performance is never a guarantee of future โresults.
Digging into the data, the โaverage return during midterm election years-those occurring โขin the second year of โคa presidential term-hasโ been approximately โ17.1%, considerably higher than the average annualโ return of 10.1% across all years asโค 1926.โ Notably,โค gains have occurred irrespective of which party controlsโฃ the White House or Congress. The strongest midterm year was 1934, with a gain of 54.3%, while 1946 saw a more modest โincrease of 6.8%.
However, the โขdata also reveals variability. There โhave been instances of negative returns in midterm years, including 1942 (-10.4%) and 1974 (-29.8%). The period promptly following the election frequently enoughโ experiences a โข”relief โขrally” as uncertainty diminishes,โ but this is not alwaysโ the case.โ Investors should be prepared for potentialโ short-term fluctuations.
Jamie Chisholmโ is a markets reporter based in London.
