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.

Get the full white paper

Should investors be concerned about the midterms?

Download PDF

Next steps to consider

Quantitative Investing

Find out how a blend of human insight, data, and technology can help uncover opportunity for your clients.

Learn more

Fidelity's Custom SMAs

Offer a more tailored experience to your clients with our custom SMAs' personalization capabilities, investment and tax management expertise, and client-focused service model.

Learn more