Tomorrow is Election Day for the U.S. midterms. Tonight, Wall Street’s attention is split between after-hours earnings from Apple and Palantir Technologies, and bets already being placed on who will control Congress tomorrow.
First, a look at the odds from polls and prediction markets, as of November 2. In the House, Democrats have a strong chance of winning: Polymarket puts their odds at 93%, Kalshi at 92%, and forecaster Decision Desk HQ at about 80%, with Democrats expected to win 238 seats. The Cook Political Report projects a net gain of 12 to 22 seats for Democrats. The national generic ballot polling average (RealClearPolling) shows Democrats leading by 8.3 percentage points. Republicans currently hold 218 House seats, Democrats 214, with one independent member and two vacancies. Democrats need a net gain of just three seats to flip the chamber.
The Senate is the real cliffhanger. Of the 35 seats up for election, Republicans are defending 22 and Democrats 13. Republicans currently hold 53 Senate seats and Democrats 45, with two independents who caucus with the Democrats. Democrats need a net gain of four seats to regain control. Polymarket and Kalshi both put Democrats’ chances at about 68%; Decision Desk HQ gives them about 60%, projecting 52 seats. The Cook Political Report expects Democrats to gain two to six seats, with seven races still toss-ups, six of them Republican-held seats.
The odds of Democrats flipping both chambers—a “blue sweep”—range from 54% to 72%, depending on the source: Decision Desk HQ puts it at 55%, Kalshi at 66%, and crypto prediction market predict.fun at 72%. By contrast, the odds of Republicans keeping control of both chambers have fallen to just 6% to 19%. In other words, markets have largely priced in Democrats winning at least the House. The Senate is the only real wildcard.
Why are markets so focused on a midterm election? Because it will directly determine what Trump can do over the next two years. If Democrats win the House, they can constrain the White House on legislation, budgets, and government oversight. If they also take the Senate, even appointments of senior officials and federal judges will be affected. For markets, that means agendas such as tariffs, extending tax cuts, and deregulation are likely to be put on hold.
The gubernatorial races are also worth watching. Thirty-six states are electing governors this year. In past years, these would have been just local news, but this year is different: state governments hold the keys to AI infrastructure. Whether data centers can be built, how quickly land-use and energy permits are approved, and how electricity prices are set depend largely on governors. News service Newsquawk’s election preview explicitly notes that this year’s gubernatorial elections matter far more to markets than in the past, because of the expansion of AI infrastructure.
The same goes for crypto markets. The U.S. crypto market structure bill is still stalled in Congress. If control of Congress changes hands, both the bill’s pace and its final form could change. That’s no small matter for Bitcoin and other crypto assets. Bitcoin is hovering near its 200-day moving average, and the election result could be the straw that either breaks or supports that level.
Of course, it’s too early to draw conclusions. There is still a gap of more than ten percentage points between prediction markets and polling models: for the House, Polymarket gives Democrats 93%, while Decision Desk HQ puts them at only about 80%; for the Senate, the two differ by about eight percentage points. Polls reflect the present, while prediction markets reflect expectations backed by real money. Neither is the same as the result. The 2016 and 2024 presidential elections both reminded markets that polls can be wrong, and surprises may arrive late, but they do arrive.
The chain of events is clear: once the election results are in, uncertainty fades. Investors will first assess whether Congress is divided or swept by one party, then price in the policy outlook for the next two years. A divided Congress means policy gridlock and little getting done, which may actually bring “predictable calm” for markets in the short term. A Democratic sweep would mean Trump’s agenda faces a broad roadblock. Whether that’s positive or negative over the long term depends on whether investors are more worried about tighter regulation or policy reversals.
The risks are plain to see: last Friday, the S&P 500 fell 1.82% and the Nasdaq Composite dropped 2.86%. Futures are edging up in premarket trading today, with S&P 500 futures up about 0.5% and Nasdaq 100 futures up about 0.9%. U.S. markets open at 22:30 tonight (U.S. winter time); Apple and Palantir Technologies report earnings after the close. The ISM manufacturing PMI will be released at 22:00 Beijing time, with a forecast of 54.5. Preliminary results will start coming in on election night tomorrow. If the races in key states are tight and vote counting is delayed, markets will fear not who wins, but the lack of a result. Friday also brings the October jobs report. This week, almost every day has a variable that could change the direction of markets.
Before election night, first watch tonight’s earnings and the market open. The real direction may not become clear until late tomorrow night.
#美国中期选举 #USStocks
First, a look at the odds from polls and prediction markets, as of November 2. In the House, Democrats have a strong chance of winning: Polymarket puts their odds at 93%, Kalshi at 92%, and forecaster Decision Desk HQ at about 80%, with Democrats expected to win 238 seats. The Cook Political Report projects a net gain of 12 to 22 seats for Democrats. The national generic ballot polling average (RealClearPolling) shows Democrats leading by 8.3 percentage points. Republicans currently hold 218 House seats, Democrats 214, with one independent member and two vacancies. Democrats need a net gain of just three seats to flip the chamber.
The Senate is the real cliffhanger. Of the 35 seats up for election, Republicans are defending 22 and Democrats 13. Republicans currently hold 53 Senate seats and Democrats 45, with two independents who caucus with the Democrats. Democrats need a net gain of four seats to regain control. Polymarket and Kalshi both put Democrats’ chances at about 68%; Decision Desk HQ gives them about 60%, projecting 52 seats. The Cook Political Report expects Democrats to gain two to six seats, with seven races still toss-ups, six of them Republican-held seats.
The odds of Democrats flipping both chambers—a “blue sweep”—range from 54% to 72%, depending on the source: Decision Desk HQ puts it at 55%, Kalshi at 66%, and crypto prediction market predict.fun at 72%. By contrast, the odds of Republicans keeping control of both chambers have fallen to just 6% to 19%. In other words, markets have largely priced in Democrats winning at least the House. The Senate is the only real wildcard.
Why are markets so focused on a midterm election? Because it will directly determine what Trump can do over the next two years. If Democrats win the House, they can constrain the White House on legislation, budgets, and government oversight. If they also take the Senate, even appointments of senior officials and federal judges will be affected. For markets, that means agendas such as tariffs, extending tax cuts, and deregulation are likely to be put on hold.
The gubernatorial races are also worth watching. Thirty-six states are electing governors this year. In past years, these would have been just local news, but this year is different: state governments hold the keys to AI infrastructure. Whether data centers can be built, how quickly land-use and energy permits are approved, and how electricity prices are set depend largely on governors. News service Newsquawk’s election preview explicitly notes that this year’s gubernatorial elections matter far more to markets than in the past, because of the expansion of AI infrastructure.
The same goes for crypto markets. The U.S. crypto market structure bill is still stalled in Congress. If control of Congress changes hands, both the bill’s pace and its final form could change. That’s no small matter for Bitcoin and other crypto assets. Bitcoin is hovering near its 200-day moving average, and the election result could be the straw that either breaks or supports that level.
Of course, it’s too early to draw conclusions. There is still a gap of more than ten percentage points between prediction markets and polling models: for the House, Polymarket gives Democrats 93%, while Decision Desk HQ puts them at only about 80%; for the Senate, the two differ by about eight percentage points. Polls reflect the present, while prediction markets reflect expectations backed by real money. Neither is the same as the result. The 2016 and 2024 presidential elections both reminded markets that polls can be wrong, and surprises may arrive late, but they do arrive.
The chain of events is clear: once the election results are in, uncertainty fades. Investors will first assess whether Congress is divided or swept by one party, then price in the policy outlook for the next two years. A divided Congress means policy gridlock and little getting done, which may actually bring “predictable calm” for markets in the short term. A Democratic sweep would mean Trump’s agenda faces a broad roadblock. Whether that’s positive or negative over the long term depends on whether investors are more worried about tighter regulation or policy reversals.
The risks are plain to see: last Friday, the S&P 500 fell 1.82% and the Nasdaq Composite dropped 2.86%. Futures are edging up in premarket trading today, with S&P 500 futures up about 0.5% and Nasdaq 100 futures up about 0.9%. U.S. markets open at 22:30 tonight (U.S. winter time); Apple and Palantir Technologies report earnings after the close. The ISM manufacturing PMI will be released at 22:00 Beijing time, with a forecast of 54.5. Preliminary results will start coming in on election night tomorrow. If the races in key states are tight and vote counting is delayed, markets will fear not who wins, but the lack of a result. Friday also brings the October jobs report. This week, almost every day has a variable that could change the direction of markets.
Before election night, first watch tonight’s earnings and the market open. The real direction may not become clear until late tomorrow night.
#美国中期选举 #USStocks