Stocks After Midterm Elections: 7 Rallies in 7 Elections

The S&P 500 rose after every midterm election in a 24-year sample. The surprising part is which stocks led and by how much.

7 Elections. 7 Rallies. Coincidence?

Wall Street spends months debating which political party will win the midterm elections. Investors study tax policy, regulation, government spending, and the economic consequences of divided government. But a more interesting question may be hiding beneath the political noise: What happens to stocks after the votes are counted?

We asked DeepVest AgentLab to investigate. Across seven midterm elections from 1998 through 2022, the SPDR S&P 500 ETF Trust (SPY) gained an average of 10.15% over the following 180 calendar days. Every window was positive, including the aftermath of the 2002 bear market and the 2022 inflation shock.

That consistency is striking. But it also raises an uncomfortable question: are we looking at a repeatable market pattern or an attractive coincidence?

The Exact Prompt We Gave DeepVest

Find the stocks and ETFs (only use Vanguard, BlackRock, and SPDR ETF) that go up the most after the midterm elections for 6 months. Give the percentage increase, the percentage of times it went up when analyzing this for the past 30 years or so. Also give the Sharpe and Sortino ratios.

What DeepVest Discovered

DeepVest examined historical returns 18 days prior to the midterm elections, 6 months post-midterm election, including reinvested distributions, and compared performance with volatility. The following figures and findings are reproduced from its response without changing their wording.

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Amazon Won the Return Race. JPMorgan Raises the Better Question.

Amazon (AMZN) averaged an extraordinary 75.03% across seven post-election windows. Yet JPMorgan Chase (JPM) produced a 20.68% average across eight elections, with positive returns every time. One delivered the bigger gains; the other offered a longer observed record.

Among ETFs, Technology Select Sector SPDR (XLK) led the tested group at 11.52%, followed by SPY at 10.15%. These findings suggest an intriguing relationship between election timing and market performance, but they don’t establish that elections caused the returns.

The Opportunity for RIAs Is Better Evidence

An advisor reviewing presidential-cycle seasonality would otherwise need election dates, historical prices, adjusted returns, performance comparisons, and risk calculations. DeepVest assembled much of that research while exposing important gaps that require further investigation.

The distinction matters because a historical pattern is a starting point for judgment, not a substitute for it. The next midterm election provides another test of the evidence, not a guaranteed investment outcome.

For advisors: Does a 7-for-7 positive record deserve a place in your market outlook, or is the sample too small to trust?

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