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U.S. midterm
2026-10-07 02:07:06

As U.S. midterms approach, stocks are pricing fading uncertainty more than who wins

With just over a month until the Nov. 3 U.S. midterm elections, markets are moving into a familiar political trading window. But the historical record cited in the article suggests investors should be careful about treating the election itself as a simple bearish catalyst for equities. Data from J.P. Morgan Asset Management show the S&P 500 has posted an average gain of 9.2% in midterm election years since 1937, below the 13.3% average in other years but still positive overall. The more consistent pattern has been weaker performance through the first three quarters, followed by a stronger fourth quarter and higher volatility. The piece argues that what markets really price is not a party label, but the level of uncertainty around Congress, fiscal policy and regulation. As election outcomes become clearer, that uncertainty can fade, pulling down the political risk premium. The article also stresses that history is not a trading formula: 2018 and 2022 were both midterm years, yet the S&P 500 fell as the market was driven by Federal Reserve tightening, inflation and rising rates. Looking ahead, the key variables remain rates, earnings and whether any post-election policy shift changes cash-flow expectations.

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As U.S. midterms approach, stocks are pricing fading uncertainty more than who wins