By MoneyTurkey editors 3 November 2026
Prediction markets and forecasters make a Democratic Congress the base case, and equities look set up for it. The outcome few are hedging is the status quo: Republicans keeping both chambers, which would mean hotter fiscal policy and higher long-dated yields.
Key points
- Democrats are 94 per cent favourites for the House on Kalshi and 99 per cent with Focaldata. The Senate is closer, at 67–80 per cent depending on the source.
- Kalshi prices a Democratic sweep of both chambers at roughly 72–76 per cent through election day. JPMorgan puts it at 66 per cent.
- The S&P 500 was up about 0.4–0.5 per cent at midday in New York on a chip rebound. The Dow was down about 0.5 per cent, pulled lower by Apple, and the 10-year Treasury yield was near 4.94–4.96 per cent.
- Options price an S&P 500 move of about 1.85 per cent through 6 November. The nine-day volatility gauge sits above the VIX.
- Russell Investments calls a Republican hold “the scenario that isn’t priced”.
- Results start arriving from 23:00 London time. Senate control could take days, or weeks.
What happened: the market setup
US stocks split on election day. By midday in New York, the S&P 500 was up about 0.4–0.5 per cent and the Nasdaq Composite about 0.8–1 per cent. The Dow Jones Industrial Average was down about 0.4–0.5 per cent, according to CNBC and AP. A gauge of chipmakers rose 3.5 per cent after a recent sell-off, Bloomberg reported. Apple fell about 2 per cent after a weaker margin outlook.
Bonds sold off. The 10-year yield rose more than four basis points to about 4.94 per cent, and the 2-year was near 4.61 per cent, CNBC reported. With the Fed’s target range at 3.75–4 per cent, job openings rose to a four-month high, which strengthened the case for a December rate rise. BMO’s Vail Hartman called a quarter-point December hike “the base case”. The Treasury’s quarterly refunding details come at 13:30 London time on Wednesday, and payrolls follow on Friday.
Elsewhere, Brent crude was down 1.1 per cent at about $103.60 a barrel, according to AFP, on hopes of progress in US–Iran talks. Spot gold slipped towards $3,900–3,950 an ounce. Bitcoin was around $77,500.
Volatility pricing is tilted towards this week. Saxo puts the VIX at 21.15 and the nine-day gauge at 22.46. Options price about 0.86 per cent for today’s expiry, which settles before any results are known, and 1.85 per cent through 6 November. That window covers the count, the refunding and payrolls.
The consensus: a blue wave
Forecasters broadly agree. Focaldata gives Democrats a 99 per cent chance of taking the House, with a central estimate of 237 seats against the 218 needed. It gives them a 67 per cent chance in the Senate. Nate Silver’s Silver Bulletin has the Senate at about 80 per cent. Kalshi traders priced the House at 94 per cent and the Senate at 74 per cent as of noon ET on 2 November.
All 435 House seats and 35 Senate seats are up. Republicans hold both chambers, including 53 Senate seats. Democrats need a net gain of four Senate seats, because a 50–50 split leaves Vice-President JD Vance with the deciding vote. Focaldata rates North Carolina the likeliest Democratic gain, at 98 per cent, followed by Maine, where Susan Collins is defending, at 75 per cent. Its Democratic path then needs two of Texas, Ohio, Kansas, Iowa and Alaska. Early turnout was high: the University of Florida Election Lab counted 59.1 million early and mail ballots before election day.
Strategists argue that equities have not fully priced a sweep. CNBC cited investors warning that a Democratic Congress could weigh on stocks on Wednesday, especially AI names. JPMorgan’s scenario map, reported by CNBC, expects a blue wave to move the S&P 500 between −0.25 and +0.5 per cent. It sees lower long-dated yields if Democrats control the purse strings, and advises buying any tech dip, since AI-limiting bills would face a presidential veto.
The unpriced tail: a Republican hold
The bigger surprise would be no change. Russell Investments says the biggest risk is “the scenario that isn’t priced”: Republicans keeping full control of Congress. In that case, it argues, the economy would probably run hotter. That would lift nominal growth but keep inflation sticky and rates “higher for longer”.
JPMorgan gives a Republican hold a 7 per cent chance and expects a 1–1.25 per cent rally in the S&P 500 because it adds no new regulatory risk. It also expects higher long-dated yields on bigger deficits. A Republican hold would collide with a 10-year yield already near 5 per cent and a Fed debating a hike. Higher yields could absorb much of the equity relief.
There is a second risk: a slow count. Man Group’s Adam Keogh told CNBC that the options market “shows few signs of accounting for” a result that takes weeks.
Playbook by scenario
Blue wave (base case). JPMorgan sees hospitals as the “clearest beneficiaries” if Medicaid cuts are delayed or reversed. It also names Medicaid-focused managed care, water and environmental services, and utilities with renewables exposure (CNBC). Man Group expects healthcare and retail to gain, with investment banks, brokers and, to a lesser extent, defence lagging. AI and data-centre stocks face headline risk from regulation and oversight. Long-dated Treasuries could rally.
Split Congress (Democratic House, Republican Senate). JPMorgan’s gridlock basket covers healthcare, defence, civil infrastructure and selected big tech, including Gilead, Oracle, Meta and Sherwin-Williams. The bank says gridlock has historically gone with positive S&P 500 returns. It expects a rise of 0.5–1 per cent on the night.
Republican hold (tail). JPMorgan’s “red wall” basket favours data centres, traditional energy and nuclear, financials, and defence and cybersecurity. Names include Devon Energy, Lockheed Martin, L3Harris and Bank of America. The bond market is likely to be the main pressure point: steeper curves and higher term premia.
Whatever the result, tariffs stay a presidential matter. A new Congress will not unwind them overnight.
What to watch tonight (London time)
- 23:00: First polls close in parts of Indiana and Kentucky.
- 00:00–03:00: Most polls close, including the main battlegrounds: North Carolina, Maine, Ohio, Texas, Kansas and Iowa. Early leads may lean Republican before mail ballots and slower-counting areas report.
- 04:00: West Coast polls close, bringing in California’s House seats.
- 06:00: Last polls close in Alaska. Ranked-choice tabulation is scheduled for 18 November. If the Senate comes down to Alaska, markets may not know who controls it for weeks.
- Wednesday: Treasury refunding at 13:30, then payrolls on Friday. Treat any equity relief as provisional until the long end of the bond market confirms it.
Prediction-market prices are not polls and do not guarantee outcomes. Market levels are intraday and will change before the close.
