Markets Fear Elections—Then Usually Move Higher

Capital Group /

18-05-2026

Capital Group’s election guide argues U.S. midterm elections historically increase volatility and uncertainty, but have had surprisingly limited impact on long-term equity returns.

Since 1931, the S&P 500 has returned an average 4.7% during midterm years, versus 9.5% in all other years.
Volatility tends to rise sharply ahead of elections, with median return volatility reaching roughly 16% in midterm years.
Historically, markets have rebounded strongly after elections, with average one-year returns of 15.4% following midterms since 1950.
Capital Group argues congressional control has had little consistent impact on long-term investment performance.

Markets dislike uncertainty in the moment. History suggests they rarely stay focused on politics for very long.