November 1, 2026, 5:03 a.m. ET
If you own stocks, you may be wondering whether the impending midterm elections will be good or bad for the stock market.
Is the market thriving after Election Day? Do traders worry if a unified government splits or if one party remains in charge?
Apparently the answer to both questions is yes.
Morningstar looked at 100 years of U.S. stock returns during election months and found that elections tend to boost the market.
Since 1926, Morningstar found, stocks have performed better in November in election years than in non-election years. In an average election year in November, shares rose 2.4%. In an average November year without an election, shares rose just 0.9%.
“It seems like there’s some sort of post-election pop going on,” said Dan Lefkovitz, Morningstar index strategist and author of the Oct. 21 report.
November is a good month for stocks, period, Lefkovitz said. This is a time of increased consumer spending as the holidays approach.
Why do stocks rise during election months?
The data doesn’t tell us why stocks improve in November in election years, but researchers have a theory: Elections put an end to things.
“Markets hate uncertainty,” Lefkovitz said. “So getting past the election ends the uncertainty. It allows markets to move forward.”
The two worst election months for the stock market were in 2000 and 1948, Morningstar found.
In 2000, uncertainty persisted for several days after a presidential election that was too close to call. The 1948 election was close enough to result in the famous headline “Dewey Defeats Truman,” shaking the markets.
If these scenarios provide any indication, Lefkovitz said, it’s that the stock market likes elections with clear winners.
This is how the market behaves before and after the election
Several other financial firms contributed by analyzing stock performance before, during and after the federal election.
A report from BlackRock reveals that annual stock returns tend to be lower over the medium term. Over the past century, stocks have risen an average of 7.5% in mid-term years and 12.4% in non-mid-term years, according to the analysis.
If this is the rule, this year could prove to be an exception. The S&P 500 is up about 12% in 2026, as of October 29.
A report from Fidelity reveals that stocks tend to perform well in the 12 months following a mid-term fiscal year. Since 1950, the S&P index has gained only 4.9% in the 12 months before the midterm elections, but 14.5% on average in the 12 months afterward.
Motley Fool reports similar results.
“The biggest thing we see after the election is we shift from talking about what could happen to talking about what happened,” said Lou Whiteman, a stock analyst at Motley Fool. “It’s uncertainty, or not knowing what the future holds, that tends to give traders goosebumps.”
Do stocks do better under unified or divided government?
A big question looming over the 2026 midterm elections is whether the elections will result in a unified or divided federal government. Polls generally predict that Republicans will lose control of at least one chamber of Congress. Republicans now hold both executive and legislative powers.
Which is better for the stock market, divided or unified government? Morningstar also looked into this question.
The analysis found that stocks have performed better under a unified federal government over the past century, with past gains averaging 1.2% per month, compared to 0.7% per month under divided government.
This conclusion flies in the face of conventional Wall Street wisdom, which suggests that divided government might be better for the stock market. Here’s the surprising reason: a unified government is more likely to pass policies, and policymaking can hinder business activity.
“Markets actually performed better overall under unified government than under divided government,” Lefkovitz said, “but they performed well in both cases.”
How would stocks respond to Election Day chaos?
As the 2026 election approaches, media coverage has focused on the possibility of the federal government intervening in the vote or questioning the results.
If chaos sets in on Election Day and uncertainty clouds the outcome, the stock market could weaken, Whiteman said. Markets hate uncertainty.
“There could be some crazy headlines on Wednesday, Thursday of next week, and there could be an outsized reaction from the stock markets,” he said in late October.
Morningstar’s Lefkovitz agrees: “If there is any doubt about the results and continued uncertainty, we could certainly see some market volatility,” he said.
The best way for an investor to respond to this scenario, Whiteman said, is to do nothing.
“Remain optimistic about the country,” he said. “Remain optimistic, even if it takes a few days, things will be resolved.”
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