--- title: Investors Are Nervous About the Midterm Elections. Stock Market History Shows You Shouldn't Be description: Worried about the 2026 midterms' impact on your investments? In the short term, the stock market has risen in 21 of the past 23 cycles. authors: - name: Jordan Chussler role: Editor, Investing and Banking url: https://money.com/author/jordan-chussler/ bio: Jordan is an investment editor and CPFC who specializes in traditional equities, gold and other precious metals, retirement savings and income investing. He combines his personal and professional interests in finance and education to help readers increase their financial literacy and make better investment choices. education: Lynn University certifications: Certified Personal Finance Counselor at_money_since: 2023 articles: 134 covers: - Investing - Banking - Credit - Credit Cards - Economy and Politics - Housing - Identity Theft - Insurance - Loans - Mortgages - Personal Finance - Professional Services - Retirement also_seen_in: - Weiss Ratings - 24/7 Wall Street - Better Investing - Yahoo Finance - Nasdaq - Investing.com - Marketbeat - MSN Money social: - https://www.linkedin.com/in/jordan-chussler-b3597811/ editors: - name: Julia Glum role: Managing Editor url: https://money.com/author/julia-glum/ bio: Julia Glum joined Money in 2018 and specializes in covering financial trends that affect everyday Americans' wallets. She also writes Dollar Scholar, a weekly newsletter that teaches young adults how to navigate the messy world of money. education: University of Florida at_money_since: 2018 articles: 454 covers: - Investing - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes - Technology also_seen_in: - Newsweek - International Business Times - CBS News - Good Morning America - WUSA9 - Pix 11 - The New York Times - Mashable - The Washington Post - CNBC - Politico social: - https://x.com/superjulia - https://www.linkedin.com/in/julia-glum published: '2026-10-26T17:56:07.000Z' modified: '2026-10-26T17:56:07.000Z' section: Investing tags: - News word_count: 1026 canonical: https://money.com/midterm-elections-stock-market-2026/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Election box and stock bull](https://img.money.com/2026/10/News-Midterm-stocks-historical.jpg) With tightly contested campaigns leading into November's midterm elections, it's no wonder Americans are worried about how the results could impact their portfolios. According to a Nationwide Retirement Institute [study](https://news.nationwide.com/download/d00600dd-7799-4e72-9783-f4c2a50bc996/nfm-25819aomidtermelectiondatadeck.pdf), 75% of investors agree that the outcome of the midterm elections could have a meaningful impact on their long-term financial plans. Additionally, 76% say they believe that if the party they support doesn't win or maintain control of Congress, it could have significant impacts on the economy. Historically, however, stocks have performed well in the year following a midterm election cycle. "As the big takeaway, \[investors\] are best off not formulating their investment strategy on political outcomes," says Gina Martin Adams, chief market strategist at HB Wealth. Taking a closer look at the current state of the stock market in the lead-up to Election Day can provide a more holistic picture of how the midterms could impact investors' futures. ## Typical stock performance after midterm elections After hitting a record high on Oct. 6, the S&P 500 experienced an AI-fueled selloff in the middle of the month, slipping by more than 2%. The index has since recovered and is trading less than 1% below its all-time high. But concerns about a bubble persist. Outside of the mega-cap companies that [dominate the index](https://money.com/index-fund-diversification-concentration-risk/), nearly 40% of the stocks in the S&P 500 are down 20% or more, placing them firmly in bear markets. Yet the odds of the index finishing 2026 in positive territory are currently 89%, according to prediction market platform Kalshi. Data from Deutsche Bank shows that, in the short term, the stock market has risen in [21 of the last 23](https://finance.yahoo.com/markets/article/history-says-midterms-could-hand-the-sp-500-a-year-end-rally-chart-of-the-day-100000388.html) midterm election cycles (from one month before the election to two months after). And in the year following each of the last six midterm elections, the benchmark index has posted a gain: - Nov. 5, 2002, to Nov. 5, 2003: 14.9% - Nov. 7, 2006, to Nov. 7, 2007: 6.7% - Nov. 2, 2010, to Nov. 2, 2011: 3.7% - Nov. 4, 2014, to Nov. 4, 2015: 4.5% - Nov. 6, 2018, to Nov. 6, 2019: 11.7% - Nov. 8, 2022, to Nov. 8, 2023: 14.5% In half of those instances, the S&P 500's one-year performance exceeded its long-run average return of 10% dating back to the index's inception in 1957. But there are circumstances beyond elections to consider for those years' underperformances. In 2006, the midterms were held in the wake of the housing bubble bursting and in the lead-up to the global financial crisis that persisted through 2008. In May 2011, six months after the 2010 election, the S&P 500 declined 19% through October, bottoming just shy of the threshold for a bear market. And in August 2015, nine months after the 2014 election, the index suffered a single-day flash crash of more than 5% in response to slumping Chinese markets and concerns about global economic fallout. Outliers aside, the index still finished up in those years, which fits a historical pattern. "Year two, which is the year we're in during the current presidential cycle, tends to be the weakest \[for stocks\]," Adams says. "Year three, which follows the midterms, tends to be the strongest." Moreover, federal elections land in the fourth quarter, which has seen historically strong performances over the past 13 years. Going back to 2013, the S&P 500 has only finished down in the last quarter of the year once, according to [data](https://cdn.mos.cms.futurecdn.net/Vm5835BzJmzwTHExHkVTkk-768-80.jpg.webp) from Carson Investment Research. Over that span, the index has had a median return of 6.5%. ## How investors should approach the midterms Nationwide's study also found that 40% of investors say they made changes to their retirement savings or portfolio in anticipation of the 2026 midterms. That includes 15% of respondents who have moved money into more conservative or lower-risk investments and 13% who diversified into different asset classes or sectors. But 88% of respondents did not consult a [financial advisor](https://money.com/m/best-financial-advisors/) about potential election-related risks. Of advisors who *were* consulted, nearly 1 in 4 warn strongly against making portfolio changes based on election-related anxiety. "There's no historical evidence that a meaningful shift in Congress will have a materially stronger impact on markets," Adams says. That shift has become commonplace. Since 1894, the party of the president [has lost seats](https://riponsociety.org/article/the-midterm-curse-and-the-balance-of-power-in-washington/) in the House of Representatives in all but three midterm elections. In the Senate, that has occurred in two-thirds of midterm elections. But according to research conducted by HB Wealth in September, that change in the balance of power has been followed by fruitful results for investors. "In all of the election years in which we've had a midterm shift that resulted in a Republican president with a divided government, the next year's return averaged 17%," says Adams. ## Market-timing typically results in missed gains On the other hand, investors who altered their strategies in the lead-up to previous elections and attempted to time the market were the most likely to miss out on the S&P 500's ensuing gains. Financial services firm [Charles Schwab analyzed](https://www.schwab.com/learn/story/does-market-timing-work) 80 separate 20-year periods involving five different investing styles. In every scenario, it found that investors who leave money in cash or cash alternatives in the hopes of timing the bottom of a [pullback or correction](https://money.com/stock-market-crash-panic-sell-august/#:~:text=Phrasing%20is%20important%2C%20and%20investors%20should%20understand%20the%20differences%20between%20a%20pullback%2C%20correction%20and%20crash%3A), yet who fail to deploy those funds, perform the worst. Adams says that this election cycle is unlikely to deviate dramatically from historical precedent. But that doesn't stop investors from being nervous about the potential impact of midterm elections on their portfolios. "I think they tend to be over-captivated with policymaking out of Washington as a major market driver," she says. "It wouldn't surprise me if investors are letting their political perspective seep into their investment plans." More than 6 in 10 advisors who responded to the Nationwide study said that in an election year, the best course of action is not adjusting their or their clients' investment strategies. That marks an 11-percentage point increase from the 52% of advisors who said the same during the 2024 election cycle. "\[Stocks' performances\] are very persistently positive in the year after a midterm," Adams says. "In the end, profitability and interest rates are the only two things that really and have extraordinary meaning over time." ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/midterm-elections-stock-market-2026/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Investing", "item": "https://money.com/investing/" }, { "@type": "ListItem", "position": 3, "name": "Stock Market", "item": "https://money.com/stock-market/" }, { "@type": "ListItem", "position": 4, "name": "Investors Are Nervous About the Midterm Elections. 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