At a glance
- Voters gave Democrats control of both the House and the Senate, by wider margins than polls suggested.
- Even so, the result is a divided government: Congress is led by one party, the White House by the other, and neither side has the votes to pass major legislation on its own.
- That typically means more gridlock than sweeping change.
- Elections make headlines, but over time markets have tended to follow earnings, interest rates and the economy.
What happened in the 2026 midterms?
Democrats are projected to hold at least 54 Senate seats and roughly 258 House seats, based on unofficial results as of November 4, 2026.1 That is short of the 60 Senate votes needed to overcome a filibuster and the two-thirds majority needed to override a presidential veto. The new Congress takes office in January 2027.
Will divided government lead to gridlock?
Large new laws are unlikely over the next two years. What is more likely: budget negotiations, the possibility of a government shutdown (current funding runs through December 11), and a debate over raising the federal debt limit sometime in 2027.1
Could a government shutdown affect markets?
A shutdown or debt limit debate can create headlines and short bursts of market volatility. Historically, their lasting effect on markets has been limited.
Will the midterms change my taxes?
Significant near-term changes are less likely, because major changes to current tax law would require agreement from both Congress and the White House.
What do the midterms mean for bonds and interest rates?
The election does not change the forces behind today’s bond yields overnight. As we discussed in our Q4 update, government borrowing, inflation and strong demand for capital have pushed bond yields to levels not seen in about two decades.2 For investors, today’s higher yields mean bonds are paying more income than they have in years.
Will the election slow AI and data center investment?
Federal rules that would meaningfully slow the build-out of AI and data centers appear unlikely over the next two years. Local permitting and energy decisions at the state level are more likely to shape the pace of new projects.1
What matters most for markets after the election?
Earnings still matter most. Company profits have been growing faster than stock prices, which has brought valuations down from earlier in the year.2 Nothing in the election results changes that picture today.
How do midterm elections affect the stock market?
Since 1930, the S&P 500 has not declined in the 12 months following a midterm election, with an average price return of about 14%.3 That is a meaningful pattern, but it is based on a limited number of elections, and past performance is no guarantee of future results.
Midterm results have also been a poor guide to the next presidential election.1 Trying to position a portfolio around political outcomes two years out is rarely productive.
Should you change your portfolio because of the election?
Moments like this are a good time to make sure your allocation is still where it should be, rather than to make changes based on political outcomes. Your portfolio is built around your goals, time horizon and comfort with risk, not around election cycles.
If you have questions about how the election may affect your plan, we’re always happy to talk it through with you.
Sources: 1. Oxford Economics, “US: Midterms Q&A – Implications for Trump’s final two years and beyond,” November 4, 2026. 2. Perigon Wealth Management, CIO Quarterly Update Q4 2026, “Rising Yields and Your Portfolio.” 3. State Street Investment Management, “The morning after the midterms,” November 4, 2026.
The 2026 midterms and what they mean for your long-term plans
Share the post
Christopher Broderick
Director of Investments and Research
At a glance
What happened in the 2026 midterms?
Democrats are projected to hold at least 54 Senate seats and roughly 258 House seats, based on unofficial results as of November 4, 2026.1 That is short of the 60 Senate votes needed to overcome a filibuster and the two-thirds majority needed to override a presidential veto. The new Congress takes office in January 2027.
Will divided government lead to gridlock?
Large new laws are unlikely over the next two years. What is more likely: budget negotiations, the possibility of a government shutdown (current funding runs through December 11), and a debate over raising the federal debt limit sometime in 2027.1
Could a government shutdown affect markets?
A shutdown or debt limit debate can create headlines and short bursts of market volatility. Historically, their lasting effect on markets has been limited.
Will the midterms change my taxes?
Significant near-term changes are less likely, because major changes to current tax law would require agreement from both Congress and the White House.
What do the midterms mean for bonds and interest rates?
The election does not change the forces behind today’s bond yields overnight. As we discussed in our Q4 update, government borrowing, inflation and strong demand for capital have pushed bond yields to levels not seen in about two decades.2 For investors, today’s higher yields mean bonds are paying more income than they have in years.
Will the election slow AI and data center investment?
Federal rules that would meaningfully slow the build-out of AI and data centers appear unlikely over the next two years. Local permitting and energy decisions at the state level are more likely to shape the pace of new projects.1
What matters most for markets after the election?
Earnings still matter most. Company profits have been growing faster than stock prices, which has brought valuations down from earlier in the year.2 Nothing in the election results changes that picture today.
How do midterm elections affect the stock market?
Since 1930, the S&P 500 has not declined in the 12 months following a midterm election, with an average price return of about 14%.3 That is a meaningful pattern, but it is based on a limited number of elections, and past performance is no guarantee of future results.
Midterm results have also been a poor guide to the next presidential election.1 Trying to position a portfolio around political outcomes two years out is rarely productive.
Should you change your portfolio because of the election?
Moments like this are a good time to make sure your allocation is still where it should be, rather than to make changes based on political outcomes. Your portfolio is built around your goals, time horizon and comfort with risk, not around election cycles.
If you have questions about how the election may affect your plan, we’re always happy to talk it through with you.
Sources: 1. Oxford Economics, “US: Midterms Q&A – Implications for Trump’s final two years and beyond,” November 4, 2026. 2. Perigon Wealth Management, CIO Quarterly Update Q4 2026, “Rising Yields and Your Portfolio.” 3. State Street Investment Management, “The morning after the midterms,” November 4, 2026.
Insights
Latest News
The 2026 midterms and what they mean for your long-term plans
2026 Year-End Financial Planning Checklist
Perigon Rises to No. 77 on Barron’s Top 100 RIAs List