US equity markets are currently underperforming, a trend that analysts attribute to the historical "midterm effect" observed in years leading up to US congressional elections.
The current market weakness mirrors patterns seen in previous election cycles, where investor caution typically mounts in the months preceding the November vote.
Historical data indicates that this pre-election volatility is often followed by a recovery.
Markets have traditionally rallied in the period after the midterm elections, as uncertainty regarding the political landscape diminishes.
This seasonal pattern suggests that the current downturn may be a temporary phase rather than a structural shift in market sentiment.
The "Sell in May and go away" adage, which warns of weaker returns during the summer months, appears to be holding true for 2026.