Historical stock market cycle analysis
The gist
The S&P 500 gained in the 12 months after all 19 U.S. midterms since 1950, GNG Research data shows.
Midterm years are the cycle's weakest, so the pattern's durability is the question.
How it unfolded
- 1950 –2022The S&P 500 finished higher in the 12 months after all 19 U.S. midterm elections since 1950, a 100% hit rate, according to GNG Research. The firm found an average gain of 14.1% over six months and 15.1% over 12 months.
- 1950 –2023The Stock Trader's Almanac, cited by The Motley Fool, reported an average S&P 500 return of 4.6% in year two of the presidential cycle since 1950.
- 1944 –2026The S&P 500 posted an average gain of just 3.8% during midterm election years, compared with 10.9% for the other three years of the presidential cycle, data through September 30, 2026 shows.
Key terms
- S&P 500
- A stock market index tracking the performance of 500 large US companies listed on American exchanges.
- midterms
- US general elections held near the midpoint of a president's four-year term, when all House seats and about a third of Senate seats are contested.
- presidential cycle
- The four-year cycle of a US presidential term, often linked to a theory that stock markets follow a predictable pattern across those years.
Source: Wikipedia