July’s Midterm-Year Track Record Remains Favorable
As the market transitions into the second half of 2026, historical seasonality continues to suggest that July could provide traders and investors with a positive month. July has traditionally been one of the stronger months of the year, even during midterm election years, particularly for large-cap stocks.
Since 1950, July ranks as the third-best month of the year for both the DJIA and S&P 500 in midterm years, posting average gains of 1.6% and 1.3%, respectively. The month has also produced more advances than declines, with DJIA rising in 12 of the last 19 midterm-year Julys and S&P 500 advancing 11 times.
Looking at all years from 1950 through 2025, July’s performance remains consistently positive. DJIA has risen in 67.1% of Julys with an average gain of 1.4%, while the S&P 500 has advanced 60.5% of the time with an average gain of 1.3%. Even NASDAQ, which has historically exhibited more volatility, has gained in 58.2% of Julys and delivered an average return of 0.9%.
Small-cap performance has been more mixed. While the Russell 1000 maintains a respectable July record, the Russell 2000’s average gains have historically lagged, especially during midterm years. This suggests traders and investors may continue to favor larger, more established companies if uncertainty surrounding inflation, interest rates, and economic growth persists.
Market conditions in 2026 remain heavily influenced by Federal Reserve policy, inflation trends, and earnings expectations. Nevertheless, history indicates that July has often provided a welcome tailwind for equities, even during midterm election years.
