J.P. Morgan Asset Management says the S&P 500 ended higher in every 12-month stretch after a midterm election in its data since 1950, offering context as U.S. voters choose Congress Tuesday, Nov. 3.
The firm estimates an average gain of about 15% across the subsequent 12-month periods and a 6.6% average return for the fourth quarter of midterm election years. Jordan Jackson, a global market strategist at J.P. Morgan Asset Management, cautioned that “no statistic should be taken in isolation.”
The firm says that as campaign uncertainty recedes, investors tend to focus again on economic conditions and policy. The 6.6% figure refers to the election-year quarter, while the 15% average covers the following 12-month periods.
The record describes past returns; it does not establish that midterm elections caused the gains. Tuesday’s vote will decide control of Congress, with all 435 House seats and about one-third of Senate seats contested. Analysts quoted by The National said divided control could constrain major tax or regulatory changes, while legislative gridlock could complicate negotiations over the debt ceiling and government funding.
Economic data show growth alongside higher borrowing costs. The Bureau of Economic Analysis (BEA) said real U.S. gross domestic product (GDP) expanded at a 3.4% annual rate in the third quarter, up from 2.2% in the second quarter.
The Federal Reserve raised its federal funds target range to 3.75% to 4% in September. The 10-year Treasury yield was 4.94% on Oct. 30, according to U.S. Treasury data.
A separate company-specific figure comes from Alphabet, which reported $51.355 billion in property and equipment purchases and negative free cash flow of $9.065 billion for the quarter ended Sept. 30.
The BEA is scheduled to publish its second estimate of third-quarter GDP on Nov. 25. The Federal Open Market Committee (FOMC) next meets Dec. 8-9.
