Fidelity: Since 1938, the S&P 500 has a 95% probability of rising in the year following midterm elections.

on November 2, according to Fidelity statistics, since 1938, the probability of the S&P 500 index posting gains within 12 months following U.S. midterm elections stands at 95%, with an average return of approximately 14%. In contrast, the average return during the second year of a presidential term (i.e., midterm election years) is only about 5%.

Statistics from multiple institutions also show that following all 19 midterm elections since 1950, the S&P 500 closed higher within the subsequent 12 months every time, averaging a gain of approximately 15%. The weakest post-election rally was around 1% following 1986, while the strongest reached roughly 33% after 1954. Only after 1938 did the index decline by approximately 5%, and performance after 1946 was essentially flat.

The upcoming U.S. midterm elections will be held on November 3. Year-to-date, the S&P 500 has risen over 11%, with an intrayear maximum drawdown of about 9%, roughly half the average drawdown for midterm election years, showing a stronger trend than historical norms. Fidelity notes that this pattern is unrelated to which party wins the election, but past performance does not guarantee future results.