S&P 500 Will Likely See October Midterm Rally

Investors often see gains during midterm election years as historical data points toward potential growth in October.

Updated on Sept. 21, 2026 in Investing

Isometric editorial illustration of a brass bell and iron weight on a flat surface, representing historical financial market trends. — Historical data from 1950 to 2025 suggests the S&P 500 may see average gains of 3% during October in midterm election years. AI Illustration. Upload story photo >

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Historical data from 1950 through 2025 indicates that the S&P 500 averages a 3.0% return during October in midterm election years. Investors may see these trends provide a potential boost as the index enters the final quarter of 2026.

Why it matters

Understanding historical market performance during election cycles helps households frame their long-term investment strategies against known patterns. These recurring trends offer context for investors assessing their portfolio exposure during periods of shifting sentiment.

The S&P 500 averages a 3.0% return in October during midterm election years, a positive outcome occurring 73.7% of the time according to data from 1950 to 2025. While the index holds a 11.76% year-to-date gain, current sentiment shows a Fear level of 29 out of 100.

The players

S&P 500

An index tracking the performance of 500 large companies in the United States that serves as a benchmark for equity market health.

SPDR S&P 500 ETF Trust

An investment product that tracks the S&P 500 index and provides retail investors with broad exposure to the U.S. stock market.

Invesco QQQ Trust

An exchange-traded fund that tracks the Nasdaq-100 index, often used by investors to gain exposure to large-cap technology stocks.

The details

The index recently demonstrated resilience by avoiding a single 1% drop throughout September 2026. It continues to hold above its early June 2026 peak and remains supported by the upward-sloping 20-week moving average. Despite these indicators, the NAAIM Exposure Index has dropped 30% over the last three weeks, reflecting a shift in investor activity.

1950-2025: Data period for historical midterm year market returns.
June 2026: The S&P 500 reached a peak point.
September 2026: The S&P 500 avoided a single 1% daily decline.
October 2026: The timeframe for the projected market rally.

Money Landscape

The current market environment follows a well-documented pattern of midterm election year cycles observed between 1950 and 2025. This historical range highlights recurring periods of volatility followed by seasonal adjustments in the equity markets.

Investors should review their current risk tolerance levels given the recent 30% drop in the NAAIM Exposure Index. Any significant adjustments to your asset allocation should be discussed with a qualified financial professional to ensure they align with your long-term goals.

The takeaway

While historical data suggests a potential rally, market sentiment remains cautious with a Fear level of 29. Investors should focus on their long-term financial plans rather than short-term performance shifts when evaluating their portfolios.