US Midterms Preview - November 2026
By Kathleen Brooks, Research Director UK
Overview
The article discusses the upcoming US Midterm elections scheduled for November 3, 2026, highlighting the potential for the Democrats to gain control of both the House and Senate. Polls indicate a strong likelihood of a Democratic victory, driven by high voter turnout and dissatisfaction with the current administration's handling of economic issues such as rising gas prices and inflation.
Polling Insights
Current predictions suggest a 71% chance for Democrats to win control of Congress, with a recent NBC News poll showing public preference for Democratic control at 52% compared to 44% for Republicans. However, the article cautions against over-reliance on polls, citing past inaccuracies, including unexpected outcomes in previous elections.
Market Reactions
As the election approaches, market sentiment appears optimistic, with tech stocks recovering from previous declines and oil prices dropping. The article notes that the outcome of the elections could significantly influence oil prices, particularly if the Democrats win, potentially leading to a resolution in tensions with Iran and a decrease in oil prices below $100 per barrel.
Historical Context
The article reflects on the historical performance of markets following midterm elections, noting that since 1950, the S&P 500 has consistently risen in the 12 months following midterms, averaging a 15% gain. This trend suggests that market volatility often decreases once election uncertainty is resolved.
Impact on Bonds and AI Sector
The bond market is also highlighted, with stable yields observed leading up to the elections. A divided government, should the Democrats win, could lead to political gridlock, which historically results in lower bond yields. Additionally, the article discusses potential implications for the AI sector, as Democratic candidates have expressed opposition to AI data centers, which could slow down AI development and impact related investments.
Conclusion
In conclusion, the article emphasizes the importance of the upcoming elections on various market sectors and investor sentiment. With historical trends suggesting a favorable market response post-midterms, investors may be poised to re-enter the market following the election results.