Election Week Market Briefing: What Past Midterms Say About Stocks After the Vote

 

The short answer: midterms make noise, not lasting damage

Election week is here — Americans vote on Tuesday, November 3 — and market commentary is full of predictions about what the results mean for stocks. Here is what the historical record says instead: in every midterm election year going back to 1950, the S&P 500 has finished the following 12 months higher, with an average gain of about 15%, according to J.P. Morgan Asset Management data. That does not predict this year — it is a 19-observation sample, not a law of nature. But it is a useful anchor while headlines compete for your attention.

This briefing covers what typically happens to markets during midterm weeks, what history shows after the vote, and what actually drives returns instead of elections.

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The midterm-week volatility pattern

Midterm weeks tend to be choppier than average. That is not a forecast — it is the recurring pattern: uncertainty peaks just before votes are counted, trading volumes shift around the event, and prices swing on partial results and projections. Midterm years have historically brought larger-than-average drawdowns at some point during the year, which is exactly what tempts investors to react to headlines.

The key distinction: volatility is not the same as lasting damage. A volatile week can still end a volatile year inside a longer uptrend. Investors who confuse the two end up selling the dip they were afraid of and missing the recovery that followed — a pattern repeated in nearly every midterm cycle. It is worth noting the other side of the same data: the fourth quarter of midterm years has averaged a 6.6% return, per the same J.P. Morgan analysis — the year-end stretch has historically done the heavy lifting.

What history shows after the vote

• The S&P 500 has been positive in the 12 months following every midterm since 1950, averaging roughly 15% (J.P. Morgan Asset Management; data through the 2022 midterms). Past performance does not guarantee future results.
• Some of the market's strongest stretches have come after elections, as uncertainty fades and investors refocus on corporate fundamentals.
• Research on which party controls Congress finds little consistent effect on long-term market performance. Divided or unified government has mattered far less than earnings, rates, and economic growth.

Why does this pattern exist? Not because elections are good for markets, but because the removal of uncertainty is. Markets price in worst cases before the vote; when the actual outcome — whatever it is — replaces speculation, the uncertainty discount unwinds. One honest caveat most coverage skips: 19 midterm cycles is a small sample, and the pattern describes where the market finished 12 months later, not how smooth the ride was.

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What actually moves markets instead

If elections are mostly noise for long-term returns, what is signal? The same fundamentals that drive markets in non-election years:

• Corporate earnings growth — the primary long-term engine of stock returns.
• Interest rates and monetary policy — the Fed's stance moves valuations more than any single election.
• Labor market strength and inflation — the real economy underneath the headlines.
• Valuations — what you pay for earnings matters more than who won which seat.

Congress does control things that matter at the margins — tax law, retirement account rules, healthcare regulation — which is why planning (tax strategy, contribution limits) deserves more attention than predicting (repositioning a portfolio on a forecast).

What to watch this week

A briefing should tell you what to watch, not what will happen. This week:

• Volatility around results, especially in sectors tied to policy speculation. Expect sharp moves on headlines; treat them as sentiment, not information.
• Trading volume patterns — election weeks often see volume dry up before the vote and surge after, which can exaggerate price moves in thin trading.
• The fundamentals calendar — earnings reports and economic data releases continue regardless of the vote, and they will matter more for prices a month from now than Tuesday's results.
• Your own behavior — a Nationwide Retirement Institute survey (Harris Poll, August–September 2026) found 4 in 10 investors have already changed their portfolios in anticipation of these midterms, while more than 6 in 10 advisors say the best move in an election year is not to change strategy. If you feel the urge to act, that is the moment to check whether you are responding to your plan or to the news cycle.

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The takeaway

Every two years, election season sells the same story: this time the outcome will remake the market. And every two years, the market's actual verdict is quieter — a volatile week, an uncertainty discount that unwinds, and a return to earnings, rates, and growth as the drivers that matter.

Watch the week. Ignore the urge to trade it. The data across 19 midterm cycles says the investors who did best were the ones who let the noise pass.

This briefing is informational only, not investment advice. Historical patterns do not predict future results.

Sources

• J.P. Morgan Asset Management — "How do markets perform post-midterms?" (S&P 500 post-midterm returns since 1950; data as of October 6, 2026) — https://am.jpmorgan.com/wr/en/asset-management/institutional/insights/market-insights/market-updates/on-the-minds-of-investors/how-do-markets-perform-post-midterms/
• Nationwide Retirement Institute — "4 in 10 Investors Have Changed Their Retirement Savings or Portfolio Ahead of 2026 Midterm Elections" (survey by the Harris Poll, Aug. 24–Sept. 11, 2026) — https://news.nationwide.com/4-in-10-investors-have-changed-their-retirement-savings-or-portfolio-ahead-of-2026-midterm-elections/
• Bipartisan Policy Center — The 2026 Midterms: Key Dates and Events (Election Day: Tuesday, November 3, 2026)