US stock futures were in green before the opening bell on Wednesday, November 4 as investors assesed the victory of Democrats in the midterm polls.
Dow Jones futures gained 1.02% to 52,426, S&P 500 futures traded 0.64% higher at 7,645.25, while Nasdaq futures advanced 0.49% to 28,443.5 by 3:25 pm IST.
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The gains come after Democrats won control of both chambers of Congress in the 2026 US midterms, ending Republican control of Washington, in a significant setback for President Donald Trump.
A recent note by JPMorgan indicated that investors could respond with limited jump or even a marginal decline in the S&P 500 index following the victory of Democrats. JPMorgan says that a Democratic sweep is expected to bring higher policy and regulatory uncertainty, which includes potential implications for the artificial intelligence sector, and that this may weigh on sentiment, even if the election outcome does not immediately result into major legislative changes.
How Does Wall Street Typically React During Midterm Polls?
Historically, performance of the S&P 500 around US midterm elections, the S&P 500 surge in all the four-year presidential cycle since 1949. According to a report by Investing.com, the average gain of the index stood at 20.3%, while the median return was around 22.3%The strongest performance was a gain of 43.6%, while the weakest was 1.3%. Towards the end of the midterm year, the index jumped in 15 of 19 cycles, by 3.6% on average, with a range from losses of 7.0% to gains of 13.6%.
An average cycle usually indicates less progress in the first two years, lower towards the midterm and strongest near the pre-election year. In the midterm year, cycles range from 48% lower in 1973-76 to 64% up in1997-2000. Even as reports estimate losses after the victory of Democrats, the current election cycle was different from the usual weak midterm year. During the last week before midterm, the S&P 500 was around 27.6% higher than its first weekly close of 2025, up from 5,942 to 7,580. The average cycle was 8.9% higher during this period and the median 10%, while the middle half of all cycles stood in the range of −3.6% and +23.3%. Notably, three cycles were higher, including 1985–88, up 49.1%, 1997–2000, 46.9% higher and 2013–16, up 37.6%.
READ | Global AI Stocks Fell On US Midterm Verdict. So Why Did TCS And Infosys Fall Too?
There have been five cycles that remained higher in the week before the midterm, and here's what happened towards the end of the pre-election year. The S&P 500 gained 49.1% in the 1985–88 cycle before the midterm, and rose 1.3% thereafter. Similarly, the index advanced 46.9% in the 1997–2000 cycle, followed by a 33.7% gain. In the 2013–16 cycle, it rose 37.6% before the midterm and 1.3% afterwards. Other notable cycles included 1949–52, when the index gained 27.2% before the midterm and 20.5% thereafter, and 2009–12, when it rose 27% and 6.3%, respectively. Based on average, these cycles advanced 12.6% subsequently and the rest of fourteen gained 23.1%. Three out of the five posted small gains, and two recorded flat outcomes. However, the 1997–2000 cycle indicated the second-strongest start, followed by one of the best stretches on record.
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