Commentary

Should investors be concerned about the midterms

The midterm investment cycle is real, but it’s not a trading rule and it shouldn’t be used as a primary market predictor.

By: Denise Chisholm

Updated: 7/1/2026

Key Takeaways

Stocks have historically been weaker before midterms and stronger afterward, but this pattern reflects changing policy uncertainty—not election outcomes.
Uncertainty typically peaks ahead of elections and then eases afterward—especially with divided government—helping risk premiums fall and equities rerate higher.
Business spending and earnings remain strong, and historically, both have been more important drivers of the market than election timing.
With earnings growth at historically low levels, conditions have often preceded gains—with about 88% odds of a positive market over the next 12 months when starting from a similar trough.

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Should investors be concerned about the midterms?

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