Carson Group chief market strategist Ryan Detrick points to the seasonal pattern. In a chart posted on X on Sept. 20, Detrick showed that, since 1950, October has been the best-performing month of the year in U.S. midterm years, averaging a 3% gain for the S&P 500 and posting positive returns 73.7% of the time.

November ranks second, averaging a 2.7% gain, with positive returns 78.9% of the time. “Almost there,” he wrote, a nod to the fact that markets are just exiting what his data shows is the weakest month of the cycle: September, which has averaged a 0.8% decline.

The pattern also lines up with research from some of Wall Street’s biggest firms.

What UBS’s research shows

A recent report from UBS Global Research examined previous midterm elections since 1950, which is 19 in total, to assess their potential impact on equities and equity volatility. During midterm election years, S&P 500 returns have averaged about 6% from September through year-end, compared with about 4% in other years. Through March, the average return has been approximately 14%, according to the report.

Returns were negative only in 1978, amid inflation; 2002, during the bursting of the tech bubble; and 2018, amid the trade war and the Federal Reserve’s rate hikes.

“The market has typically been choppy from August-end until early October, with a median decline of -1.4%, before the market starts to rally through year-end and into the next year,” UBS strategist Maxwell Grinacoff wrote in a research note. The rally in U.S. equities around midterm elections has historically outpaced the market’s average performance in other years, according to Grinacoff.

Equity volatility follows a similar pattern. September and October have historically been the most volatile months on record since 1928, particularly during midterm election years. Volatility, however, has ultimately normalized after the elections and into year-end, he explained.

The Q4 pattern, according to JPMorgan

J.P. Morgan Asset Management finds that the S&P 500 has historically been slightly negative on average in each of the first three quarters of midterm years, before averaging a 6.6% gain in the fourth quarter. It also notes that markets have historically begun rallying less than a month before Election Day.

This year’s setup adds tension to that historical pattern. The S&P 500 was up approximately 13% year to date on a total return basis as of September 18, putting 2026 on track for a fourth consecutive year of gains.

That raises the question: Does a historically strong Q4 still play out after the market has already banked such strong gains, or does the market’s valuation and economic backdrop alter the historical pattern?

J.P. Morgan’s analysis suggests that the historical Q4 pattern should not be viewed in isolation. The firm says markets tend to rally as Election Day approaches because election related uncertainty is reduced, while emphasizing that fundamentals, including monetary policy, economic growth, labor markets, corporate profits and valuations, are more important indicators of future returns than the election calendar itself.