Based on the election date to the same date the following year, the S&P 500 rose in all 19 midterm elections from 1950 to 2022, with a median return of approximately 14.5%. If we consider the period from election to the end of June of the following year since 1942, all 21 elections also saw positive returns, with an average increase of approximately 16.6%. While election results and reduced policy uncertainty can indeed lower risk premiums, historical gains are often accompanied by shifts in monetary policy or improved profitability, and are not solely driven by elections.
