The 2026 midterm election season has been a nail-biter. Republicans entered the contests with one of the slimmest margins of control of the House of Representatives in history and seem poised to lose power. The Senate is likely, but not certain, to stay red. But an awful lot can happen in the final weeks and days to turn the tide one way or the other.

One thing is much more predictable, however: The stock market almost always shakes off the uncertainty that leads up to a midterm election and performs well in the third year of a presidency.

Midterm years are choppy, with a bias to the downside. Since 1926, the U.S. stock market has delivered its weakest annual returns in midterm years, on average, rising just 7.5%, compared with an overall average annual return of 12.4%, according to data from BlackRock analysts Bryan Wood and Mark Peterson.…