Stocks have never posted a losing year after a midterm election since 1950. Here's why that matters heading into 2026 elections.

"Since 1950, the S&P 500 has not posted a single negative one-year return in the 12 months following a midterm election. This pattern has persisted through various economic challenges, indicating a strong post-election recovery for stocks."

"Midterm elections create significant uncertainty regarding tax rates, regulations, and trade policies, leading to a 'midterm discount' where stocks experience flat or choppy trading until the election results are clear."

"Once the votes are counted, the removal of policy uncertainty allows investors to reallocate capital, leading to a strong performance in the year following midterm elections, with the S&P 500's average return well above its long-run average."

Since 1950, the S&P 500 has consistently posted positive returns in the year following midterm elections, regardless of the political party in power. Midterm years are typically volatile and uncertain, leading to a 'midterm discount' where stocks trade flat. However, once elections conclude, the removal of policy uncertainty allows capital to flow back into the market, resulting in strong performance in the subsequent year. Historically, the average return in the post-midterm year exceeds the long-term average for the S&P 500.

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