2025-12-30 12:21:03

Political reshuffle, and the market trembles along with it. There is a clear pattern in the US stock market over the years — during election years, new government policies often disrupt the operating rhythm of listed companies.

Looking at the data over a longer period makes it even clearer. The three major US stock indices exhibit an interesting phenomenon: the year before a presidential election is usually a bullish period, but during midterm election years, the trend starts to change.

How poor is the performance during midterm election years? The Dow Jones Industrial Average has an average annual return of only 5.2%, while the S&P 500 barely manages a 4.6% gain. The Nasdaq Composite, on the other hand, flips to negative — -0.5%. It may not seem like much, but for a market accustomed to high returns, this is a clear sign of recession.

Therefore, for traders, the election cycle not only influences policy but also directly impacts stock market gains and losses.

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SelfCustodyBro

· 8h ago

Election years are always the year to harvest the little guys; it's a fixed rule. NDAQ has fallen so much, and you still say not enough? Your sense of amount might be problematic. As soon as policies change, retail investors get cut; who doesn't know the cyclical pattern? The key is that those who got in early have already cashed out. May I ask, are political cycles really that credible, or are they just excuses for the big players? Midterm elections have always been a bloodbath. I have long switched to USDT to avoid it.

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BlockDetective

· 8h ago

Nasdaq drops 0.5% and starts to vomit? Is that real? Can such fluctuations be called a recession signal? Election year hype is hype, but the key still depends on the Fed's stance. So political cyclicality = tradable cyclicality? That logic is a bit far-fetched, my friend. Looking at it from another angle, during mid-term elections, tech stocks plunge, which better shows that fundamentals are the main players. No wonder some say the US stock market is just a pawn in political games... Political players probably rely on this to harvest profits. What sounds good is a cycle; what sounds bad is systemic risk. By the way, can this pattern be used for shorting?

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SchrodingerAirdrop

· 9h ago

Election years are the time to harvest the leeks; politicians change policies, retail investors are still looking at financial reports, and the government’s official document causes a market plunge. During the midterm elections, the Nasdaq dropped by -0.5% directly, which is outrageous. The Fed and Wall Street’s performance is truly remarkable. Every election cycle, the rally is a joke; only at critical moments do you realize what unpredictability really means. This data looks mild but is actually poison. After getting used to high returns, a slight drop feels like cutting meat.

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ChainMelonWatcher

· 9h ago

The Nasdaq can still decline 0.5% during midterm election years, so now you have to learn to buy the dip.

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