# Divided Government Cases Posted Stronger S&P 500 Returns

By Enna Lee

Canonical URL: https://www.tokenpost.com/news/investing/47385
Published: 2026-11-03T05:58:56.000Z
Updated: 2026-11-03T05:58:56.000Z
Section: Investing

> The index rose in all 11 post-midterm periods from 1982 to 2022, averaging 13.7%. Returns varied across shorter and longer windows.

The S&P 500 gained an average 15% in the year after U.S. elections that produced divided government, versus 11.5% under unified control, a historical pattern entering Tuesday's midterms.

The divided-government group included 10 midterm elections and five presidential elections in which one party held the White House while another controlled at least one chamber of Congress. Across those 15 cases, the index rose in 14 over the following year. Under unified control, with one party holding the presidency and Congress, the average gain was 11.5%.

The midterm-only data set covers 11 elections from 1982 through 2022. The S&P 500 finished higher in every following 12-month period, with returns averaging 13.7%. The average gain after presidential elections was 13.8%. These historical results do not show that election outcomes caused the gains; interest rates, company earnings and economic conditions also shape market returns.

The path could be uneven even when the longer measurement window ended higher. In 1986, 1990 and 2006, Democrats controlled both chambers of Congress while a Republican held the White House. Across those three cases, the S&P 500 fell an average 0.5% on the first trading day after results. It then gained an average 3.4% over the next month and 10.9% over the next year.

The calendar-year and post-election comparisons also differed in 2018. The Fed raised interest rates four times that year, and the S&P 500 ended the year down 6.2%. In the 12 months after the midterm election, however, it rose 11.7%. Following the 2000 election, the index lost 22.1% over a year amid the internet bubble's collapse. After the 2020 election, it gained 38.3% over a year as markets rebounded from a pandemic-driven selloff.

The AI trade and whether declines in technology stocks will continue are among current market concerns. Carson Group chief market strategist Ryan Detrick said the bull market may remain healthy if AI activity continues and the economy keeps growing. Jim Reid, Deutsche Bank's head of macro and thematic research, said seasonal patterns do not determine market direction and pointed to concerns involving Iran, AI and France, as well as rising global bond yields.

U.S. voters go to the polls Tuesday, Nov. 3, for the midterm elections.