The 2026 US midterm election is less than a month away, and Wall Street is bracing for volatility. Democrats are favored to retake the House, while the Senate race remains tight. Historical data shows stocks typically dip before midterms but rise afterward — the S&P 500 has gained in the 12 months following every post-WWII midterm.
In 2026, the market has already risen 13% year-to-date, avoiding the usual pre-election slump. President Trump’s veto power could block tax hikes or regulations even if Democrats win both chambers. The economy is expected to grow in 2027, supporting equities.
AI data centers have become a pivotal issue, with voters across parties concerned about infrastructure and regulation. Gridlock — if Democrats win only one chamber — is seen as ideal for markets, historically delivering 13.7% annual returns under split Congresses. A full Democratic takeover may trigger sell-offs due to potential AI restrictions, threatening chipmakers and tech firms.
Bond prices may rise under gridlock, lowering borrowing costs for manufacturers.
المصدر: Bloomberg Markets · لخّصه HeadlinesBriefing