Do U.S. stocks always rise after midterm elections? All 11 historical instances ended in gains, with an average return of 13.7%, but it is

CNBC data covering 1980-2024 shows the S&P 500 has risen in the 12 months following all 11 US midterm elections since 1982, averaging a 13.7% gain—nearly matching the 13.8% average after presidential elections. Markets historically favor divided government: across 10 midterms and 5 presidential elections producing split control of the White House and Congress, the S&P 500 averaged a 15% one-year return with 14 of 15 samples positive, versus 11.5% under unified government. However, banks caution that macro forces outweigh the political calendar: SocGen notes the Fed cycle, liquidity, and corporate earnings drive asset prices, citing 2018 when four Fed rate hikes left the S&P 500 down 6.2% for the year despite the midterm tailwind, and 2000 when the dot-com bust produced a 22.1% post-election decline. Deutsche Bank's Jim Reid flags Middle East geopolitics, French political turmoil, and rising global bond yields as risks that won't fade with the vote, while Carson Group's Ryan Detrick says the bull market remains intact as long as the AI cycle and economic expansion hold. Watch next: whether tech giants' AI capex converts to earnings and sovereign debt sustainability, which will determine if the rally extends beyond the post-election sentiment window.