S&P 500 Historically Rallies After Midterms, Data Shows
Historical data going back to 1950 shows the S&P 500 averages a 15.5% gain in the nine months following midterm elections.
Investors rattled by recent stock-market turbulence may find some reassurance in decades of historical data: the period immediately following midterm elections has consistently been one of the strongest stretches of the year for U.S. equities.
According to data stretching back to 1950, the S&P 500 has delivered an average return of 15.5% in the nine months between Election Day and the following June 30. The pattern has held regardless of which party gained or retained congressional control, suggesting the relief rally is driven more by the resolution of political uncertainty than by any specific policy outcome.
Read more Horizon Kinetics Acquires Texas Pacific Land Stock at $340 →
Market analysts have long noted that uncertainty itself — rather than a particular electoral result — tends to weigh on investor sentiment in the weeks and months leading up to a major vote. Once ballots are counted and the political landscape becomes clearer, capital that had been sitting on the sidelines often flows back into equities, historically lifting broad indexes.
While past performance does not guarantee future results, the consistency of the post-midterm pattern across more than seven decades and multiple economic cycles gives some strategists reason to expect at least a partial recovery from current selling pressure. Investors, however, are cautioned that macroeconomic variables such as inflation, interest rates, and corporate earnings can still override seasonal tendencies in any given year.
Continue reading at MarketWatch.com
