U.S. Bancorp research ties a Republican president with a fully Democratic Congress to just 1% below-average three-month stock returns.
CXO Advisory data shows a Republican president paired with a Democratic Senate averaged only 3% annual S&P 500 returns versus an 8% all-years baseline.
Post-midterm S&P 500 returns historically run strong, gaining 40% after 1954 and 16% after 2018, pushing back on Senate-control warnings.
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Silver Bulletin, via Newsweek, now gives Democrats 74.8% Senate odds. The party’s average sits at 52.2 seats on data through Oct. 8. Silver Bulletin, via Newsweek, had Democrats at 56.2% on Aug. 5, and their odds fell as low as 50.1% on Sept. 7.
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That is one model among several, and the forecasts disagree by a wide margin. Polymarket prices Democratic control at 63.5%. Kalshi, via DeFiRate, has it at 60.2%. Decision Desk HQ gives Democrats 56%, with an expected 51 Democratic seats.
Traders and forecasters are moving apart. Polymarket’s Democratic Senate contract fell 4 cents over the past week while the model climbed.
Decision Desk HQ rates Ohio (51% Democratic), Iowa (52%), Maine (54%) and Texas (57%) as tossups. Silver rates several of them more favorably for Democrats. Those race-level differences account for much of the gap between the headline numbers.
A Warning Sign Built on a Real Sample
CXO Advisory compiled average annual S&P 500 returns by which party controlled the presidency, the House and the Senate over nearly a century. In CXO Advisory’s data, years with a Republican president and a Democratic Senate averaged 3.0% across 24 years. CXO Advisory’s average for all years was 8.1% over 95 years. That makes it the second-lowest category in the chart, and it has the most years behind it of any weak category.
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Keep the Republican president but give the Senate to Republicans, and CXO Advisory’s average rises to 7.5% across 20 years.
House Rows Point the Opposite Way
The House data runs the other way. Under a Republican president, a Democratic House averaged 7.9% over 33 years, per CXO Advisory, close to the all-years average. A Republican House averaged 2.9% over 9 years, per CXO Advisory. In this data, a Democratic Senate looks weak and a Democratic House looks ordinary.
The House is the part of this election forecasters are most sure about. Silver Bulletin, via Newsweek, gives Democrats a 93.1% chance there. Kalshi, via DeFiRate, prices it at 89.5%, with Polymarket at 90.5%. So the likely setup is a Republican president facing a Democratic House and a Democratic Senate.
Thin Samples Cap What the Data Can Prove
The categories overlap, so a single year shows up in several rows. Some samples are tiny. CXO Advisory’s all-Republican category averaged 8.2% over 7 years, well above the 2.9% for a Republican president and House. That suggests the few remaining years, when a Democratic Senate sat alongside them, pull the figure down, though this is an observation from two categories and a group that small cannot support conclusions.
CXO reports averages only. It shows no variance and no significance testing, and nothing in it shows that party control causes returns. CXO Advisory itself warns that its subgroups are very small for reliable conclusions, and it decided not to break the data down further.
Signals to Track Into Election Day
Midterm history pushes back on the warning. According to Motley Fool, the S&P 500 returned 39.9% in the twelve months after the 1954 midterms, 7.3% after 2006 and 16.3% after 2018. U.S. Bancorp (NYSE:USB) research, via Webull (NASDAQ:BULL), provides another data point. It links a Republican president with a fully Democratic Congress to three-month returns about 0.99% below average. That is a far smaller effect than the annual averages suggest.
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