Sell in May and Go Away in a Midterm Election Year: What History Says About 2026

Two Seasonal Patterns Are Colliding Right Now

Every May, the same debate resurfaces on trading desks and financial media: is the old Wall Street saying "sell in May and go away" still relevant?

In most years, the answer is nuanced. The pattern exists in the historical data but is far from guaranteed. Staying invested has clearly been the winning strategy over time.

But 2026 is not a typical year. It's a midterm election year — and when you overlay the midterm election cycle on top of the traditional May seasonal, the data gets considerably more interesting.

Since 1950, the S&P 500 has averaged just 4.6% in the second year of a presidential term (midterm years), compared to the long-term average of roughly 10%. The average intra-year drawdown in midterm election years has been 18%. And the May-through-October window is historically the weakest six-month stretch for stocks under any conditions.

This piece breaks down what the historical data actually shows, where the two patterns intersect, and how to use alerts to stay positioned for both the weakness and the recovery that typically follows.

The "Sell in May" Pattern: What the Data Actually Shows

The phrase originates from an old London saying: "Sell in May and go away, come back on St. Leger's Day" — referring to a September horse race after which British financiers would return to the markets. The idea migrated to Wall Street and eventually became one of the most-discussed seasonal patterns in investing.

The Six-Month Split

Since 1950, the S&P 500's performance has been meaningfully different depending on the half of the year:

That's a significant gap — roughly 5 percentage points of underperformance during the summer-fall window. Over 75 years of data, that's not a coincidence.

May itself is the fifth-weakest calendar month since 1950, averaging just 0.4% and finishing positive only 62% of the time. June and August have also historically been among the weaker months.

The Recent Counter-Trend

Here's where it gets complicated: the pattern has weakened in recent years. Since 2013, May has averaged a return of 1.5%, and 12 of the 13 years through 2025 saw positive May returns. Over the past 12 years, the May-October period averaged 5.1-6.3% — much closer to the winter six months.

So the pattern exists, but it is not inevitable, and recent history suggests it has faded.

The Opportunity Cost of Market Timing

The most important argument against mechanically selling every May comes from simple math. An investor who put $1,000 into the S&P 500 on January 1, 1976, and held through 2025 would have grown that investment to $294,795.

An investor who followed the seasonal pattern exactly — selling each April 30 and reinvesting each November 1 — would have just $46,351.

The act of getting out and back in, missing dividends, paying taxes, and losing the best winter gains of each year added up to a massive drag over time.

The Presidential Election Cycle: Year Two Is Historically the Weakest

Stock market historian Yale Hirsch identified the presidential election cycle theory in 1968, and it has held up reasonably well across subsequent decades.

The theory holds that stock market returns follow a four-year pattern tied to the president's term:

Year two — the midterm election year — is the weakest of the four, and the explanation is straightforward: the president has just finished the campaign. Popular policies get implemented; difficult reforms happen now, while there's time for the economy to recover before the next election. Markets reprice for the uncertainty.

What Makes Midterm Years Painful

It is not just about returns — it is about volatility. Going back to 1926, the S&P 500 has seen an average peak-to-trough drawdown of 18.2% during midterm election years. That means even in years that end roughly flat or slightly positive, investors often sit through a gut-wrenching drop somewhere between January and October.

Per Bank of America's chief technical strategist, January and June tend to be the two weakest months in midterm election years specifically:

• January: average return of -1.77%
• June: average return of nearly -2%

The post-election period reverses this sharply. The S&P 500 has averaged a 12.4% return in the 12 months following midterm elections, and Q4 of midterm years has been positive 86% of the time.

When Both Patterns Collide: The Midterm May Effect

In most years, "sell in May" is background noise — a pattern that shows up in long-term averages but is easily overwhelmed by other factors. In midterm election years, it gets reinforcement from a second source of pressure.

The summer of a midterm election year hits with:

• The natural seasonal tendency toward underperformance (May-October)
• The structural headwind of year-two policy uncertainty
• Elevated volatility as markets try to price in Congressional election outcomes
• Often, mid-cycle Federal Reserve tightening cycles (which historically have occurred in years 1-2)

Historically, the May-through-October window in midterm election years has been one of the weakest on record. The uncertainty does not resolve until November — and that is precisely when markets historically begin to recover.

A Pattern Worth Taking Seriously in 2026

2026 checks every box:

• It is the second year of the presidential term
• Congressional midterm elections are November 2026
• The S&P 500 has already absorbed significant tariff and trade policy volatility in 2025-2026
• Interest rates and Federal Reserve policy remain in transition

Wall Street's consensus coming into 2026 was cautious on the midterm pattern but optimistic that AI spending and potential rate cuts could offset structural weakness. Whether that optimism plays out is exactly the kind of thing you need alerts for — not predictions.

What Happens After Midterm Elections: The Recovery Case

Before you conclude that the May-October window in a midterm year is pure doom, the other half of the data matters just as much.

History strongly favors a recovery once midterm uncertainty resolves:

• S&P 500 post-midterm 12-month average return: +12.4%
• Q4 of midterm years positive: 86% of the time, average gain 6.6%
• Best six months (November-April) following midterms: frequently among the strongest in the cycle

The reason is simple: markets hate uncertainty more than bad news. Once the election results are in — regardless of which party wins — the uncertainty premium comes out of valuations. Policy direction becomes knowable. Institutional investors who were sitting on cash begin to redeploy.

Traders who understand this pattern use the summer weakness not to exit the market, but to accumulate positions at better prices ahead of the historically strong Q4-Q1 recovery window.

Sectors That Historically Underperform in the May-Midterm Window

Not all sectors are equally exposed to summer/midterm weakness. Historical data points to some recurring patterns:

The classic defensive rotation — from growth to value, from cyclicals to defensives — tends to be more pronounced during midterm summer periods precisely because uncertainty is elevated.

4 Alerts to Set for the Midterm Summer Window

You do not need to predict whether the pattern plays out. You need to be notified when the key levels and signals are triggered.

Alert 1: S&P 500 Correction Level Alert

A correction (10% drop from recent highs) in a midterm year is not unusual — it's historically the norm. Set an alert to be notified when the S&P approaches that threshold so you can assess whether to add exposure.

Alert 2: Defensive Sector Rotation Signal

When utilities and consumer staples outperform cyclicals, it signals defensive positioning is underway — a classic precursor to broader market pullbacks.

Alert 3: Small-Cap Breakdown Watch

The Russell 2000 tends to lead both the downside and the upside during midterm year swings. A sustained breakdown in small caps before the S&P 500 follows is often the earliest warning.

Alert 4: Pre-Election Recovery Setup

The historical playbook says Q4 of midterm years is when the recovery begins. Set a buy-side alert to catch the reversal before it is obvious.

The Midterm Playbook: A Framework, Not a Prediction

Seasonal patterns are probability distributions, not certainties. The May-October weakness in midterm years has played out enough times to be worth respecting — but it has also been overwhelmed by strong earnings, Fed pivots, and macro tailwinds in years where the structural backdrop was simply too positive to fight.

The framework to hold in 2026:

Phase 1 — May through October (increased risk window):

• Expect elevated volatility and the possibility of a 10-18% correction
• Focus on defensive sectors and quality names that can absorb selling
• Set alerts on key support levels rather than making large directional bets
• Treat any significant pullback as a potential opportunity, not confirmation of doom

Phase 2 — Post-election (historically the recovery window):

• The 12 months after midterm elections have historically been among the strongest in the cycle
• Q4 of midterm years is positive 86% of the time
• Policy clarity — regardless of which party wins — tends to unlock pent-up institutional buying

What the data does not tell you:

• Whether the current macro environment will amplify or dampen the seasonal pattern
• Whether AI, tariffs, interest rates, or earnings will override the historical tendency
• The exact timing of any weakness or recovery

That is why alerts matter more than predictions. You want to be notified when the market is telling you something — not locked into a seasonal script that may not play out on schedule.

Frequently Asked Questions

Is the sell in May effect stronger in 2026 because of midterms?

Historical data supports the idea that the May-October weakness is more pronounced in midterm election years. The double headwind of seasonal patterns and election-year uncertainty has historically created some of the weakest summer windows in the stock market cycle. This does not guarantee weakness in 2026, but it is a reason to take the seasonal pattern more seriously than in a typical year.

What has the S&P 500 historically done in May during midterm years?

May in midterm election years has averaged below the already modest long-term May average of 0.4%. The specific compounded effect of political uncertainty layered on top of seasonality makes May through August historically the riskiest window of a midterm year's calendar.

How should I think about portfolio risk during a midterm summer?

The key insight from historical data is that the drawdowns happen, but the recovery tends to be strong. The worst strategy is to sit through the drawdown, panic sell at the lows, and miss the post-election rally — which is what many investors do. A better approach: maintain a watchlist of quality names you want to own at lower prices, set alerts on key support levels, and have a plan for adding exposure when the recovery signals appear.

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