September 10, 2020
A closer look at the 2022 midterm election
On November 8, America will decide key election races and the balance of power in Congress. Explore what’s at stake and historical stock market performance in midterm election years.
What’s at stake?
Voters will decide the makeup of the entire House of Representatives and just over a third of the Senate.
Who's in power now?
Democrats hold narrow majorities in both the House and the Senate.
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In the House:
Democrats have a 222ꟷ213 majority.
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In the Senate:
A 50ꟷ50 split, with Democrats narrowly maintaining control. As president of the Senate, Vice President Kamala Harris, a Democrat, can cast votes to break 50ꟷ50 ties, giving the Democratic caucus an edge.
The outcome from the last midterm in 2018
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In the House:
Democrats recaptured control from Republicans, flipping a net total of 41 seats to gain a 235ꟷ199 advantage over Republicans.
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In the Senate:
A total of 26 Democratic seats and 9 Republican seats were up for election. Republicans increased their majority from 52ꟷ48 to 53ꟷ47.
Of note:
The mixed result in 2018—Democratic gains in the House with Republican gains in the Senate—marked the first midterm election since 1970 in which the president's party sustained losses in one chamber while achieving gains in the other.1
1 "Stark political divide points to a split decision in midterm elections," The Washington Post, October 13, 2018.
Market reaction
The stock market has generally shown resilience throughout four-year election cycles, although historical results have typically been stronger in the years prior to presidential elections than in presidential election years, postelection years, and midterm years. In addition, historical results show significant performance differences depending on which party has been in control of the White House, the Senate, and the House of Representatives.
In four-year election cycles, stock performance has typically been best in the year prior to a presidential election
S&P 500 Index performance, 1928ꟷ2021
Source: Bloomberg, as of 12/31/21. The S&P 500 Index tracks the performance of 500 of the largest publicly traded companies in the United States. It is not possible to invest directly in an index. Past performance does not guarantee future results.
How stocks have performed under six different political scenarios
Average annual returns of the S&P 500 Index, since 1933, when different political parties are in power
Source: RBC Capital Markets, 2022. The S&P 500 Index tracks the performance of 500 of the largest publicly traded companies in the United States. It is not possible to invest directly in an index. Past performance does not guarantee future results.
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For more information on markets, the economy, and industry trends, check out our viewpoints, Market Intelligence, and Weekly Market Recap pages as well as our Portfolio Intelligence podcast.
Important disclosures
Past performance does not guarantee future results.
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