U.S. President Donald Trump arrives to speak during a campaign rally at the Rock Hill Sports and Event Center on October 29, 2026 in Rock Hill, South Carolina.
Andrew Harnik | Getty Images News | Getty Images
Stock markets soared Wednesday following the Democratic Party’s decisive landslide victory in the 2026 midterm elections. But that wasn’t necessarily the only factor in the rise.
“President Trump’s recognition of the Democratic Party’s victory in the midterm elections and his openness to cooperation with opposition parties caused markets to rally on hopes that a dispute over the results and further polarization could be avoided,” said Thomas Hempel, senior economist at Generali Investments.
President Trump told the New York Times and the Wall Street Journal on Tuesday night that he accepts the results and intends to work with Democrats. These headlines coincided with a rebound in stock market futures.
In the lead-up to this year’s midterm elections, some on Wall Street are growing concerned about the possibility that Trump may challenge the election results. The Justice Department’s Alaska election lawsuit has raised concerns about delays in results, exacerbating market jitters that usually subside after an election.
A CNBC Fed survey found that 63% of 30 fund managers, strategists and economists believe the growing uncertainty over the balance of power caused by legal challenges to the election results poses “some degree” of market risk. This was a slight increase from 61% in September. Additionally, 14% believe it represents a “material” market risk, up from 7%.
Investors are now breathing a sigh of relief that Trump has accepted the outcome, which should “reverse extreme policy outcomes and lower risk premiums” as long as the president’s decisions hold, said George Saraveros, head of currency research at Deutsche Bank.
“X Factor”
President Trump has a history of driving markets up and down with his announcements. Jay Woods of Freedom Capital Markets said the overnight rebound in stocks was partly due to the president’s “initial tone and reaction to the outcome,” and that the focus now turns to whether Trump’s latest move actually has staying power.
“Trump will try to do the right thing and say the right thing, but he could change his mind at 2 a.m.,” said the chief market strategist. “He’s the X-factor.”
Woods added that he was “encouraged” by Wednesday’s big rally, but noted there were still headwinds that could plague the market in the coming weeks, including concerns about inflationary pressures from rising energy prices due to Middle East conflicts.
“How President Trump responds will help us overcome these headwinds,” he said.
Philip Brancato of Ozaiq said if President Trump “continues to be friendly” with Democrats, the market could be in for a “very strong” end to the year.
In any case, stock prices historically tend to rise after midterm elections, but this time there were some who were concerned about a steady rise in midterm elections. S&P500 These gains could be thwarted this year. In response to Trump’s reaction, Brancato said he doesn’t think there’s any chance the S&P 500 will reach 8,000 by the end of the year, saying, “A lot of things are predicated on President Trump, but not quite.”
Broad market indexes rose more than 1% on Wednesday, suggesting the closing price could rise about 4% to the same level.
But if President Trump remains unchanged, investors should prepare for future volatility, the chief market strategist said.
“The president is always going to be the wild card,” he said. “Let’s not let a day turn into a year. This is an instant reaction to this. There’s still a lot to figure out.”
