Key Highlights

  • The S&P 500 has been higher 12 months after each of the 19 midterm elections since 1950, by 15.1% on average, a record relevant to the SPDR S&P 500 ETF Trust (NYSEARCA:SPY), according to Motley Fool.
  • The analysis, published on Tuesday, October 20, 2026, asks whether investors should wait until after the Tuesday, November 3 midterms to buy, two weeks before the vote.
  • The question comes after the S&P 500 posted its worst week since June, falling about 1.9% to 7,659.44 on Friday, October 16, before a 0.4% rebound on Monday.
  • Nineteen elections is a small sample, and each began from different valuations, rates and earnings conditions, so the pattern is history rather than a forecast for 2027.

The Midterm Record

The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) tracks the S&P 500, and a Motley Fool analysis published on Tuesday, October 20, 2026 notes that the index has been higher 12 months after all 19 midterm elections since 1950. The average gain over those periods was 15.1%, in that analysis. The figure has not been independently checked here. The 2026 midterms fall on Tuesday, November 3. The question arrives at a tense moment: the S&P 500 fell about 1.9% in the week to October 16, its worst week since June, closing at 7,659.44 according to AP. It rose 0.4% on Monday, October 19, as technology shares rebounded, while the 10-year Treasury yield held above 5%.

Why Elections Can Shape Market Returns

The usual explanation for the pattern is uncertainty. Before a vote, investors cannot know which party will control Congress, so they may hold back or demand a discount for risk. After the result, that uncertainty clears whatever the outcome, which can release demand. Midterms often produce divided government, which can limit large policy changes and make the outlook easier to model. For the SPDR S&P 500 ETF Trust (NYSEARCA:SPY), which holds about 500 large US companies, earnings and interest rates usually matter more than politics over a year. FactSet data show third-quarter earnings growth tracking at 29%, a fundamental support that exists separately from the election calendar.

Risks and What to Watch

The main risk in leaning on the midterm record for the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is the sample size: 19 observations cannot capture every combination of valuation, inflation and policy. Today's backdrop includes a 10-year yield near 5.1%, oil near USD 100 and doubts about AI financing, conditions that may not resemble past cycles. A second risk is that waiting for clarity means missing gains if the market rises beforehand. Investors should watch the Federal Reserve decision on Wednesday, October 28, Microsoft and Alphabet results that day, the midterm vote on Tuesday, November 3 and MSCI index changes after November 30.

Where Things Stand

The answer is that the midterm record is a notable historical pattern for the SPDR S&P 500 ETF Trust (NYSEARCA:SPY), but it cannot settle when to invest. A 15.1% average gain across 19 cycles reflects relief from political uncertainty, while earnings and rates still drive returns more directly. This year starts from high yields and a fragile AI trade. The next catalysts are the Fed on October 28 and the midterms on November 3. Historical averages are not guarantees, and this is not investment advice.