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The S&P 500 in August of Midterm Election Years

by Sentimentrader
2026-08-12
With the S&P 500 historically dropping in August and September, midterm election years amplify the risk with average drawdowns of 17.8%. As Treasury yields remain high and Fed rate hike fears loom, prepare for potential Q3 volatility.

Key points

  • Over the past 30 years, the S&P 500 has consistently underperformed during late summer, averaging a -0.45% decline in August and a -0.88% decline in September.
  • Midterm election years introduce significant volatility, with average drawdowns reaching -17.8% (compared to -13.2% in non-midterm years), and these deep pullbacks typically bottom out in October or Q3.
  • The past performance is no guarantee of future results , but we should be prepared for a downturn.

Seasonal Headwinds

U.S. stocks have historically underperformed in August. In fact, over the past three decades, the S&P 500 has consistently struggled during this month. The index has averaged a decline of 0.45% in August, and performance deteriorates further in September with an average drop of 0.88%.

On our Seasonality page, you can freely select the Symbol and choose the years you want to backtest.

The S&P 500 in August of Midterm Election Years

Under Performance By Day of Month, you can view the daily returns for the current month. I prefer viewing this by trading day, which you can change under Category.

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Risk Disclosure: The information and tools provided are for research and analytical purposes only and are not intended as investment advice. Market analysis involves uncertainty, and outcomes may differ from expectations. Users should conduct their own due diligence and consider their individual circumstances before making any financial decisions. Past performance is not necessarily indicative of future results.

Hypothetical Performance Disclosure: Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.

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