Stock Market Outlook for Election Day: Historical Trends and Investor Expectations

November 1, 2026, 5:03 a.m. Eastern Time

Investors holding equities may be curious about how the upcoming midterm elections could impact the stock market.

Will the market improve after Election Day, and do traders focus on whether a unified government persists or becomes divided, or whether a single party maintains control?

Both questions appear to have affirmative answers.

Morningstar analyzed a century of U.S. stock returns for election months and determined that elections generally lift market performance.

Since 1926, Morningstar reports that November in election years has outperformed non‑election years, with average gains of 2.4% compared with 0.9% in non‑election‑year Novembers.

According to Dan Lefkovitz, a Morningstar Indexes strategist and author of a report released on October 21, there appears to be a “post‑election pop.”

Lefkovitz noted that November is a favorable month for equities, driven by increasing consumer spending as the holiday season approaches.

Why do stocks rise in election months?

While the data does not explain the underlying reasons, researchers propose that elections provide a sense of closure.

“Markets dislike uncertainty,” Lefkovitz explained. “Once the election concludes, uncertainty diminishes, allowing markets to proceed.”

Morningstar identified the two weakest election months for the stock market as 2000 and 1948.

In 2000, uncertainty persisted for several days following a presidential contest that remained too close to call. The 1948 election generated the notorious “Dewey Defeats Truman” headline, unsettling the markets.

Lefkovitz added that clear‑cut election outcomes tend to be more favorable for the stock market.

Market Performance Before and After Elections

Multiple financial firms have offered analyses of stock performance across the pre‑, during‑, and post‑election periods.

BlackRock’s report indicates that annual returns are generally lower in midterm years; over the past century, stocks have averaged 7.5% gains in midterm years versus 12.4% in non‑midterm years.

Should this pattern hold, 2026 might be an exception, as the S&P 500 has risen roughly 12% by October 29.

Fidelity research shows that the 12 months following a midterm typically see stronger gains, with the S&P gaining an average of 4.9% before midterms and 14.5% afterward since 1950.

Motley Fool corroborates these observations.

Lou Whiteman, a Motley Fool contributing analyst, observes that after an election the conversation shifts from speculative possibilities to actual outcomes, and that uncertainty about the future often unsettles traders.

Impact of Unified vs. Divided Government on Stock Market Performance

A key question for the 2026 midterms concerns whether the election will produce a unified or divided federal government. Polls suggest Republicans may lose at least one congressional chamber, even though they currently control both the presidency and Congress.

Which government structure—unified or divided—is more advantageous for the stock market? Morningstar investigated this issue.

The analysis revealed that over the past century, stocks have delivered average monthly gains of 1.2% under unified governments versus 0.7% under divided governments.

This conclusion diverges from typical Wall Street wisdom that a divided government fosters better market performance. A possible explanation is that unified governments are more capable of enacting policy, and extensive policymaking can impede business activity.

Lefkovitz noted, “Markets have generally outperformed under unified governments compared with divided ones, though they have performed well in both scenarios.”

Market Reaction to Election Day Chaos

As the 2026 election approaches, media coverage has highlighted concerns that the federal government could intervene at polling places or contest the results.

Whiteman warned that if chaos erupts on Election Day and uncertainty surrounds the outcome, the stock market could weaken, as markets inherently dislike uncertainty.

He added that “wild headlines” could appear on Wednesday or Thursday of the following week, potentially triggering a disproportionate market reaction.

Lefkovitz of Morningstar concurs, stating that any doubt about the results and lingering uncertainty may cause notable market volatility.

Whiteman advised that the optimal response for investors facing such uncertainty is to take no action.

He urged investors to “remain bullish on the nation” and “trust that, even if resolution takes a few days, things will be sorted out.”

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