You might expect elections to rattle markets. For stocks after midterm elections, history leans the other way: in the 13 midterms since 1974, the Nasdaq was higher six months later every single time. The typical gain was about 15%, roughly double what you’d get from a random six months.
Americans voted on Nov. 3, 2026, and on Nov. 4, after a rough October, the Nasdaq closed up 1.4% at 25,736.51. Here’s what the record says about the months ahead, and why I wouldn’t bet on it.
What happens to stocks after midterm elections?
Usually up, and faster than normal. This chart lines up all 13 midterms from election day. The blue line is the median path after a midterm and the gray line is the median over any six months since 1971. Each shaded area spans the middle half of the cases behind its line:
After midterms, the Nasdaq usually rose about twice as fast as normal.
Six months after the vote, the Nasdaq was higher in all 13. Over any six months since 1971, it rose about 70% of the time, with a typical gain of about 7%.
Three months out, it was higher in 12 of the 13; the exception was 2002, down about 7%.
How unusual is a perfect six-month record? If each midterm were an ordinary six months, with a 70% chance of a gain, 13 in a row would happen only about 1% of the time. That’s hard to call pure luck, but the cases aren’t independent coin flips, as the next section shows.
How did each midterm play out?
Each midterm gets its own line below. The orange dot is the lowest point in the six months after the vote, the blue dot is where the Nasdaq stood at six months, and the gray dot is where it stood a year out:
Every midterm ended six months higher, but some dipped hard first.
The ride wasn’t always smooth. The typical worst point was only about 3% below the election-day level, but in two cases the Nasdaq first fell more than 10%: about 12% after the 1974 vote and 16% in the late-2018 selloff.
A year out, the edge shrinks. The Nasdaq was higher in 12 of the cases, with a typical gain of about 19%, only about four percentage points better than a normal year. The one gray dot left of zero is 1986: a year after that election, just after the 1987 crash, the index was down about 12%.
Does it matter which party wins?
Not in this record. These midterms include big wins for both parties, and the six-month gains showed up either way. A much longer record of the S&P 500, from a Motley Fool analysis, points the same way, whichever party controlled Congress:
Two different indexes and records point the same way after midterms.
| A year after the midterm | Nasdaq since 1974 (MKViz) | S&P 500 since 1874 (Motley Fool) |
|---|---|---|
| Midterms | 13 | 38 |
| Higher a year later | 12 of 13 | +84% |
| Typical gain | +19% (median) | +14% (average) |
The president’s party has lost House seats in almost every midterm since 1938, so a shift in Congress is the normal case, not a shock.
A common explanation is that the vote removes one source of uncertainty: afterward, investors know who controls Congress. The timing matters too. Midterms fall in early November, often right after a fall selloff. The Nasdaq hit major lows on Oct. 3, 1974, Oct. 16, 1990, and Oct. 9, 2002, each just weeks before an election. Some of the post-election gains were simply rebounds that would likely have happened anyway.
Why I wouldn’t bet on it
A post-election rally would help me: one of my two index funds tracks the Nasdaq-100. Still, I’ve never bought or sold because of who won an election. I keep a fixed ratio of dividend to growth funds precisely so that headlines don’t make the call.
Thirteen cases is a small sample, and the Nasdaq rises most of the time anyway. As those 1974, 1990 and 2002 rebounds show, some of the gains had little to do with the vote. So I can’t tell whether the election caused the rally or just happened to fall in a good stretch. On days with big political news, I check one thing: how far that ratio has drifted, and I don’t move money on the result.
If you’re tempted to buy because of this pattern, remember 1986. The Fed’s December meeting will likely matter more than the vote count.
Sources
Method: We took the Nasdaq Composite's close on each midterm election day since 1974 (13 elections) and measured the change three, six and twelve months later, and the lowest point along the way, then compared the changes with the same-length change starting from every 21st trading day since 1971 (the base rate). Data: Nasdaq via FRED.