The midterm-year fourth quarter has been the strongest stretch of the four-year cycle
2026 is a US midterm year. Since 1928 the S&P 500 has risen in most midterm-year fourth quarters.
What happened
US midterm elections take place in November. Our presidential-cycle study updates every day with the latest S&P 500 data.
Why it matters
Midterm years have often been weak in the first nine months and strong after the election, as policy uncertainty fades. The pattern is well known, which can reduce how much it pays to rely on it.
What history shows
Since 1928 the S&P 500 averaged +5.55% from the end of September to the end of December in midterm years, rising in 83% of 24 cases. Across all years that quarter averaged +2.89%.
Over the 12 months after a midterm-year September, the index averaged +17.09% and rose in 88% of cases.
Seasonal backdrop
Midterm years as a whole have been the weakest year of the cycle, averaging +3.33% against +13.96% for pre-election years. This year the S&P 500 is already +13.56% year to date.
Scenarios
Possible paths and the signs that would point to each. No probabilities. Testable ones are graded on the scorecard.
Cycle holds
Post-election clarity and year-end flows lift stocks into December.
- Falling volatility after election day
Rates override the calendar
Rising yields and a hawkish Fed outweigh the seasonal tailwind.
- Second Fed hike priced
- 10-year yield making new highs
What to watch
- Early November: US midterm elections
- December 8-9: FOMC meeting