How Will Midterm Elections 2022 Affect the Stock Market? Source: shutterstock.com|Joaquin Corbalan P With the summer over, America’s focus is shifting toward the second half of a complicated year. Investors have witnessed the lingering effects of the pandemic, coupled with rising interest rates and Russia’s invasion of Ukraine. All three of these events have posed significant consequences for markets across multiple sectors. Now, another important catalyst is quickly drawing closer: The 2022 midterm elections. Midterms are not an economic event. But they do have a long history of negatively impacting financial markets in the months leading up to election day. In fact, as The New York Times reports, they are often the weakest economic months of a presidential term. So, with the midterms now in sight, investors are bracing for market history to repeat itself. The recent plunges we’ve seen from the SP 500 and Nasdaq Composite are only in keeping with this trend. According to CD Wealth Management, “Since 1962, in the 12 months prior to a midterm election, the average annual return of the SP 500 is 0.3%, well below the historical average of 8.1%.” Taking precautions to avoid midterm-induced losses is nothing new for investors.