Historical data shows that from 1942 to 2022, the S&P 500 index achieved positive returns in all 21 observation periods from November to June of the following year following the US midterm elections, with an average increase of 16.6% and individual increases ranging from 2.5% to 32.1%. During the same period, high-beta stocks (stocks more sensitive to market fluctuations) performed even better.
The US midterm elections will be held on November 3rd local time. However, the macroeconomic environment in 2026 differs significantly from historical patterns: the Federal Reserve initiated a new round of interest rate hikes in September, and the inflation rate rose to 3.7% in September; the yield on the 10-year US Treasury bond touched 5.36% this month but has since fallen back to around 4.98%. Rebounding inflation and high interest rates may continue to put pressure on stock valuations and affect market risk appetite. Whether historical seasonal patterns will continue in the current environment remains to be seen.
