The S&P 500 rose 27.6% in the first 20 months of President Trump's second term after his Jan. 20, 2025 inauguration, close to the 28.5% gain over the same stretch of his first term. The article argues the more useful question is not how the midterms will affect markets, since stocks have generally risen regardless of who leads Washington. Citing U.S. Bancorp research on 75 years of data, it says election outcomes have a “minimal impact,” and the only combination tied to below-average returns, a Republican president with full Democratic control of Congress, was about 1% below average and only for three months after the election. It also notes the S&P 500 has delivered annualized returns of 9.98% over 98 years and advises long-term investors to stick to their plans rather than react to short-term political headlines.
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Related tickers and likely impact
SPY
▲ Likely positiveSPDR S&P 500 ETF
Relevance: low
| Market | US stocks |
|---|---|
| Sector | ETF |
| Close on 10/21/2026 | 773.09 |
| Change that session | +0.53% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
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The S&P 500 had risen 30.6% since Donald Trump took office for his second term, through September 30, 2026, slightly ahead of the 28.5% gain over the first 20 months of his first term. The article notes that midterm election years have historically been the weakest for stocks, averaging a 4.9% gain, yet the market is bucking that pattern this year. Political pundits expect Democrats to gain control of the House and have a credible shot at the Senate, and a divided government has historically tended to benefit stocks by limiting sweeping legislation. Investors can gain S&P 500 exposure through an ETF such as the Vanguard S&P 500 ETF (VOO), which has a 0.03% expense ratio, or $3 a year on a $10,000 investment. The article adds that 2018 was a calmer geopolitical backdrop, whereas the war in Iran has pushed oil and inflation higher and the war in Ukraine has lasted longer than U.S. involvement in World War II.
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The author advises against holding cash to wait for the midterm election results, as past cycles suggest waiting usually brings no advantage. Across 19 midterm elections since 1950, the S&P 500 was higher a year after each vote than on Election Day, rising around 15% on average by the author's count. In the two weeks before each vote, the index rose in 14 of 19 cycles, averaging about 1.4%; investors who bought two weeks early were still up a year later in all 19 cycles, averaging around 17% versus about 15% for those who waited until Election Day. The S&P 500 currently sits about 2% below its record close of 7,818.93 earlier this month, though it is still up around 12% in 2026.
- Should You Wait Until After the Midterm Elections to Buy the S&P 500?
Since 1950, the S&P 500 was higher one year after Election Day in all 19 U.S. midterm cycles, averaging about 15% by the author's count (BNY's study put it at 16.6%). Buying two weeks before the vote made only a small difference: the index rose in 14 of 19 cycles, gaining about 1.4% on average over those two weeks. An investor who bought two weeks early and held for a year came out ahead in all 19 cycles, averaging about 17% versus about 15% for those who waited until Election Day. The index now sits about 2% below its record close of 7,818.93 on Oct. 6 after its worst week since June, yet it is still up around 12% in 2026. The author wouldn't hold back cash for the midterms, while noting that 19 cycles is a small sample and a year's returns depend on many other factors.
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