LIVE MARKETS-2026 midterm year may bring volatility, but with that, there can be opportunity

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2026 MIDTERM YEAR MAY BRING VOLATILITY, BUT WITH THAT, THERE CAN BE OPPORTUNITY

In the wake of falling 19% in 2022, the S&P 500 index .SPX rose more than 20% in both 2023 and 2024. So far in 2025, with a little over a month of trading to go, the benchmark index is on track to rise more than 12% this year.

Meanwhile, Ryan Detrick, chief market strategist at Carson Group, says as we enter 2026, get ready to hear a lot about midterm years and what that may mean for the market.

"Historically midterm years are indeed the weakest during the four-year presidential cycle. In fact, think back to 2018 and 2022—both saw vicious stock declines and negative returns for the year. Midterm years gain less than 5% on average, by far the worst out of the four-year presidential cycle, that is what you’ll hear a lot about as we head into 2026," writes Detrick in a note.

Detrick adds "But when you peel back the onion, it turns out under a second term President the returns do much better, so there’s something for everyone here."

According to Detrick, what midterms are really known for is their intra-year volatility.

In fact, he says bad news is that midterm years see a 17.5% peak-to-trough maximum correction on average during the year, far and away the most.

However, the good news is one year off the midterm-year lows, he says stocks have always been higher and are "up an extremely impressive nearly 32% on average."

Thus, Detrick believes that should we see some typical midyear volatility in 2026, "it could be very important to stay the course and not panic."

(Terence Gabriel)

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