{"id":35392,"date":"2026-11-02T11:33:23","date_gmt":"2026-11-02T11:33:23","guid":{"rendered":"https:\/\/alchemymarkets.com\/?post_type=market_insights&p=35392"},"modified":"2026-11-02T11:33:25","modified_gmt":"2026-11-02T11:33:25","slug":"midterms-stocks-spx-nov-2026","status":"publish","type":"market_insights","link":"https:\/\/alchemymarkets.com\/it\/education\/market-insights\/opening-bell\/midterms-stocks-spx-nov-2026\/","title":{"rendered":"Stocks Always Rose After Midterms. What Could Break the Streak?"},"content":{"rendered":"\n

Nineteen US midterm elections since 1950. Nineteen positive S&P 500 returns over the following year, according to Capital Group\u2019s historical study. On paper, that sounds like one of the easiest bullish trades in the market.<\/p>\n\n\n\n

Except the S&P 500 is testing its 100-day support, semiconductors have fallen towards their 200-day support, and oil is swinging on both peace talks and threats of further fighting around Iran.<\/p>\n\n\n\n

Tomorrow\u2019s vote might remove one uncertainty, but it cannot repair every balance sheet or reopen a shipping route.<\/p>\n\n\n\n

First, the number everyone wants to believe<\/strong><\/h2>\n\n\n\n

The bold claim is that the S&P 500 rose after every US midterm election since 1950. That is broadly supported by Capital Group’s historical study<\/a>: every one of the 19 completed midterm cycles through 2022 delivered a positive price return in the following twelve months, with an average gain of 15.4%.<\/p>\n\n\n\n

There is a second number circulating: 13.8%. A Schaeffer’s study published in 2022<\/a> found an average 13.89% over six months after midterms, in the 18 elections available at that time.<\/p>\n\n\n\n

Does the rally begin immediately, or is there a second-week trap?<\/strong><\/h2>\n\n\n\n

The twelve-month statistic obscures a less dependable opening.<\/p>\n\n\n\n

The S&P 500 was higher a week after 14 of the 19 elections since 1950, but by week two only 10 of 19 were positive. After one month the win rate improved to 15 of 19. A strong first-week relief move was not a guarantee that gains held.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

The second week has usually resulted in a retracement, but what follows 79% of the time in a month is an average rise of +2.34%.<\/p>\n\n\n\n

The first-to-twelve-month record reads as such:<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

First test: does the S&P 500 hold its trend?<\/strong><\/h2>\n\n\n\n

On the 2 November daily SPX chart, price is testing the 100-day EMA bollinger band\u00ae<\/a> (0.5 standard deviation).<\/p>\n\n\n\n

The important downside reference is 7,468, near the anchored VWAP<\/a>. On the upside, 7,620 is the level I want to see reclaimed, ideally on a weekly close, before treating a rebound as more than short covering.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Semiconductors show a similar dilemma. SMH has returned to the purple 200-day EMA<\/a> (0.25sd) zone near 518.77, an area it has respected on earlier pullbacks.<\/p>\n\n\n\n

But the recent blue 100-day EMA band is still overhead, around 561.97. A bounce into that zone followed by rejection would be a warning that buyers have not regained control.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

The Nasdaq chart also shows a breakdown from a symmetrical triangle<\/a> pattern within its broader rising channel.<\/p>\n\n\n\n

The working downside target is the low of the channel, but a more concrete volume-backed support to watch would be 25,853\u201326,131.<\/p>\n\n\n\n

The price is currently sitting at a thin volume-profile area, which could allow faster travel downwards if we begin to cascade lower without dip buyers.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Tech and Capex: Good growth, Expensive promises<\/strong><\/h2>\n\n\n\n

Strong AI demand is still real. South Korea\u2019s official October export release showed semiconductor exports worth $56.44 billion, up 259.4% from a year earlier.<\/p>\n\n\n\n

The headline came just 0.5 percentage points above the pre-release export-growth consensus, however, and the figures mix price, volume and calendar effects. They tell us chips are being sold, not whether every AI investment will earn an attractive return.<\/strong><\/p>\n\n\n\n

Amazon\u2019s third-quarter numbers show the trade-off. AWS revenue reached about $46 billion, up 39.3%, while Amazon\u2019s consolidated trailing free cash flow was negative $42.4 billion<\/strong>. The question for investors is whether rapid cloud growth can eventually earn back the extraordinary cash being invested in infrastructure.<\/p>\n\n\n\n

Today\u2019s Apple and Palantir results, followed by AMD on Tuesday after the US close, will test the tech market resilience even further.<\/strong> A company can report excellent revenue and still disappoint if guidance, spending or cash conversion falls short.<\/p>\n\n\n\n

For the wider bounce, I would also check whether equal-weight stocks and financials are joining tech rather than relying on a few mega-caps.<\/p>\n\n\n\n

The good news is that for now, market breadth is sitting healthy at >60.23% for S&P constituents over the 20-day average and >59.44% for the 200-day average.<\/p>\n\n\n\n

Iran could change the inflation argument overnight<\/strong><\/h2>\n\n\n\n

Oil is pulling back as mediators circulate proposals to end the US\u2013Iran conflict. Lower crude prices would usually take some pressure off inflation expectations and offer relief to growth shares.<\/p>\n\n\n\n

But the Strait of Hormuz has not been confirmed open under a signed deal. UKMTO has recorded fresh vessel warnings, with tankers and ships being struck by projectiles.<\/p>\n\n\n\n

There are also rumours floating about renewed US or Israeli strikes after the election – in a major way. If that happens, crude prices will spike as it is a black swan event.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

For now, as long as crude remains above its 20-day EMA (1sd), we have to treat retracements as a temporary cool off instead of as longer term deflation.<\/p>\n\n\n\n

Goldman Sachs has recently raised their projections for where crude prices will be in December due to disruption risks. Overall, they have Brent at $105\/bbl and WTI at $94 by December, which would be supportive of equities.<\/p>\n\n\n\n

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Goldman on oil#oott<\/a> #Iran<\/a> pic.twitter.com\/3R0qJeLq9T<\/a><\/p>— JH (@CRUDEOIL231) November 2, 2026<\/a><\/blockquote>