By Elena Vasquez

More than 50 years of US market data show equities tend to rise in the 12 months after midterm elections, while Swissquote says the S&P 500’s bullish trend remains intact despite a six-month semiconductor retracement from June to early November.

Swissquote called the market pause “an opportunity” and answered the question of whether the bullish trend was under threat “no,” citing the absence of a breach at any major support level. October’s pre-election consolidation reflected profit-taking in technology, most sharply in semiconductors.

What does the midterm pattern show?

The pause fits a recurring seasonal pattern. An analysis covering more than 50 years found that US equities historically tended to rise over the 12 months following midterm elections, with stronger gains when consolidation preceded the vote.

A chart sourced from Morgan Stanley and Bloomberg showed a significant historical tendency for the S&P 500 to rise in post-midterm months, particularly after a pre-election consolidation. Swissquote used that seasonal evidence alongside intact technical support to frame a possible recovery.

What changed after the Democrats won both chambers?

The elections produced a complete Democratic victory in the US Senate and House of Representatives. US stock indices traded erratically in the hours after the results, but selling pressure ultimately prevailed, Swissquote said.

The pressure centered on the outlook for US artificial-intelligence capital expenditure. Investors fear that Democratic legislative initiatives could slow hyperscaler investment, while semiconductor weakness amplified concern after a controlled correction from June to early November.

Swissquote said the semiconductor situation could improve over the coming months if political concerns gradually fade. The commentary also directed readers to recent separate analyses of SOX and the S&P 500 Technology sector, including a November chart examining whether the sector’s bullish trend remained in place.

Can the S&P 500 recover on technical evidence?

Swissquote says the underlying bullish trend is not threatened because the market has not breached any major support level. Proximity to those levels could instead stabilize trading and pave the way for a recovery, according to the analysis.

Three principal support clusters remain intact:

• The upper boundary of a long-term ascending chart pattern, which the market broke above last April.
• The weekly Ichimoku Kumo cloud.
• The 200-day moving average and an upward trendline in place since spring 2025.

Swissquote used weekly and daily Japanese candlestick charts to frame the technical position. The intact support and favorable post-midterm seasonality strengthen the recovery case, although the analysis presents a possibility rather than a guaranteed advance.

What risks qualify the thesis?

Swissquote said the commentary expressed a consultant’s views, did not represent the work of its research department and was intended for people familiar with financial markets and instruments. The company presented the material for information and education, not as investment, legal or tax advice.

The company makes no representation or warranty regarding the material’s quality, completeness or accuracy and disclaims liability for losses arising from decisions based on it. Past performance does not guarantee future results.

The notice said all investments carry risk and that financial instruments can lose substantial value. It also warned that CFDs can lose money rapidly because of leverage, and that most retail client accounts suffer capital losses when trading them.

Digital assets remain unregulated in most countries, where consumer protections may not apply, and cryptocurrencies are not legal tender in some jurisdictions. Swissquote classified digital assets as highly volatile and unsuitable for investors without a high-risk tolerance, while also flagging fraud, cyberattacks, network failures and identity theft.

Swissquote lists regulated businesses in Switzerland, Cyprus, Luxembourg, the UK, Malta, the UAE, Singapore, Hong Kong and South Africa, overseen by FINMA, CySEC, CSSF, the FCA, Malta’s financial regulator, Dubai’s financial regulator, Singapore’s monetary authority, Hong Kong’s SFC and South Africa’s FSCA. Its services are intended only for permitted recipients under local law.

Swissquote’s case rests on three elements: post-midterm seasonality, intact technical support and fading political concern over AI investment. The semiconductor correction remains a counterweight, and past performance offers no guarantee.