April 23, 2026, 8:48 AM EDT. The S&P 500 (^GSPC) endured its worst first quarter since 2022, slipping 5.1%, mainly amid escalated tensions in the Middle East with no clear war resolution. Economic data points to a slowing U.S. economy, with Q4 GDP growth at 1% and inflation remaining above the Federal Reserve's 2% target. Midterm election years historically produce the lowest stock returns, with the S&P 500 averaging about 5% gains during these periods. However, post-midterm lows typically lead to strong rebounds; the index has already climbed over 12% since late March. Investors face a balance of cautious optimism due to election-driven policy uncertainties and persistent economic challenges that may cap upside potential for the remainder of 2026.