How midterm election results could affect your 401(k)

Stocks surged on Nov. 4 after Democrats won decisive control of Congress in the 2026 midterms, with the Dow up 2.1% and the S&P 500 rising 1.8% in early trading, as markets welcomed an end to election uncertainty. Morningstar’s analysis of 100 years of data shows stocks average 2.4% gains in election-year Novembers versus 0.9% in non-election years, with clear winners boosting markets. The firm also found stocks perform better under unified government, averaging 1.2% monthly gains versus 0.7% under divided rule. Historical reports from BlackRock and Fidelity indicate stocks typically rise in the 12 months after midterms, with the S&P 500 averaging 14.5% gains in that period since 1950. Experts advise investors to stay calm if post-election disputes emerge, noting markets favor resolution over prolonged uncertainty.