Midterm Elections and Equity Markets: Historical S&P 500 Trends

### Session Tape — Weekend Positioning - Equity desks review historical election-year trends alongside broader macroeconomic positioning as markets prepare for upcoming legislative shifts.

## Catalyst Analysis: Historical S&P 500 Performance Around Midterms Historical data compiled by UBS strategists illustrates distinct seasonal patterns for the S&P 500 during election cycles. According to the findings, the index has recorded a median decline of 1.4% from the end of August through early October, followed by historical strength into year-end and the following spring. Specifically, the S&P 500 has averaged about a 6% gain from September through year-end, while gains from the end of August through the end of the year have averaged 14.5% with a median return of 16.4%. Furthermore, historical returns through the following March have averaged approximately 14%, though individual cycles have exhibited negative phases.

## Market Implications & Legislative Probabilities Market participants continue to monitor shifting political probabilities, including indicators pointing to Democrats holding an implied probability above 85% of taking the House in certain scenarios. As policy expectations evolve, equity strategists emphasize historical seasonality rather than speculative outcomes, maintaining a disciplined focus on broader index levels and risk management.

### Money Play No specific individual equities or tickers are mentioned in the verified factual record for this macro review. Investors tracking broader market cycles should observe seasonal S&P 500 positioning and incoming legislative developments.