Key Highlights

● November is historically the second-best month in midterm years.

● The data goes back to 1950.

● Other research also finds strong fourth quarters in midterm years.

● October 2026 was rough for the Nasdaq.

One market strategist has found that November is the second-best month for stocks in midterm election years, based on data going back to 1950, according to a market report published on September 23, 2026. By that measure, midterm-year Novembers have historically ranked among the strongest months on the calendar.

Other firms point the same way. One asset manager has found that the fourth quarter of midterm years has historically been strong, and UBS (NYSE:UBS) has found that the stretch from September to year-end in midterm years has tended to produce gains. The usual explanation is that markets dislike uncertainty, and once an election is settled, investors can focus on policy and earnings.

October broke the pattern

The same research suggested October would be friendly. In midterm years, October has historically been a strong month too. October 2026 did not cooperate. The S&P 500 fell about 71.5 points for the month, from 7,651.54 at the end of September to 7,580.07 on Friday, October 30, 2026. The Nasdaq Composite fell about 1,424 points, its worst month since March 2025.

The month ended badly. On Friday, the S&P 500 dropped 140.32 points, the Dow Jones Industrial Average lost 572.25 points to 51,770.31 and the Nasdaq Composite shed 747.73 points to 25,437.00. It was Wall Street's worst day since June, driven by Intel (NASDAQ:INTC)'s cash-burn warning, Amazon (NASDAQ:AMZN)'s negative trailing free Cash Flow and fallout from Alphabet (NASDAQ:GOOGL)'s record one-day drop.

The calendar is not destiny

One asset manager itself cautions against leaning too hard on seasonal patterns, saying fundamentals "are more important indicators of future returns than the election calendar itself." Seasonal averages describe the past, and each year brings its own mix of earnings, interest rates and global events.

This year's mix is unusual. Oil is above $100 a barrel on tensions involving Iran and the Strait of Hormuz. The Federal Reserve held rates steady on October 28, but futures markets are pricing in a December hike, and three Fed officials said Friday that rates need to go higher. St. Louis Fed President Alberto Musalem said: "I judge that additional firming of Monetary Policy will be necessary, and soon."

The midterms take place on Tuesday, November 3. Democrats are widely predicted to win the House, while the Senate is more in doubt, according to market data. An Investment manager said of a Democratic sweep: "I think that will be seen as negative for both the AI names". Investors are also watching state and local races, including in Texas, for their implications for data-center development.

Some reasons for hope

Parts of the market already look healthier than the headline indexes suggest. Nine of the 11 sectors rose in October, according to market data, and the Dow gained about 864 points for the month. The Russell 2000 rose 35.95 points for the week. An investment strategist said: "The market is much more broad than people generally want to give it Credit for."

A senior market strategist said the tech decline "does not appear abnormal" compared with earlier bull-market pullbacks.

What to watch

The first week of November is crowded. Apple (NASDAQ:AAPL) and Palantir (NASDAQ:PLTR) report on Monday, November 2, the election follows Tuesday, ISM surveys arrive during the week, and the October jobs report comes Friday, November 6. Whether November lives up to its midterm-year reputation may depend less on the calendar than on whether AI spending fears ease and the Fed's December decision comes into focus.