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US midterm elections and historical market trends

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2026-10-05 21:31 UTC → 2026-10-06 02:25 UTC · added ~~removed~~

Market analyses have examined the historical relationship between US midterm elections and the performance of various asset classes. Initial reports from NTM Advisory focused on gold and the S&P 500. The analysis noted that gold has historically performed well following midterm elections when the US dollar weakens, citing gains of 18% after the 2022 election. The S&P 500 has shown a strong tendency to rise in the 12 months following such elections, with a positive return probability exceeding 85%, though the 2018 cycle was noted as an exception due to a sharp sell-off. Subsequent analysis expanded the scope to include Bitcoin and provided a longer historical view of the S&P 500 dating back to 1950. This data suggests the S&P 500 rose in all 19 instances observed during the 12 months following a midterm election. Regarding Bitcoin, while prices have risen in the 12 months following the last three midterm elections, the asset remains characterized by high volatility. Analysts emphasize that broader economic factors, such as central bank policies and inflation, influence these historical patterns. Recent insights from Bank of America reinforce these trends, noting that the S&P 500 has historically risen in every six- and 12-month period following a midterm election since WWII. JPMorgan strategists suggest that congressional gridlock—a divided government—is often the most favorable scenario for investors, averaging a 21% gain for the S&P 500 over the subsequent two-year term due to reduced policy uncertainty. Sector-specific outlooks vary by election outcome. JPMorgan suggests healthcare, defense, and certain big tech firms could benefit under a divided government, while hospitals and renewable utilities might see gains under Democratic control. Bitcoin may also benefit from reduced political uncertainty, though its performance remains tied to interest rates, regulatory developments, and spot ETF inflows.

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