Democrats swept elections across the country and picked up majorities in the U.S. House and Senate. According to calculations from the Schwab Center for Financial Research (SCFR) based on historical S&P 500 (SPX) price-return-only data from Yahoo Finance, as of August 14, 2026, as investors move past policy and political uncertainty, markets typically move higher in the months immediately following an election.

What corners of the market might react to new faces on Capitol Hill? Here are three things to watch:

Can the S&P 500 Index (SPX), AI Ecosystem Trade, Move Higher?

Data show that since 1974, the S&P 500 has averaged a 5.7% return in the three months immediately following a midterm election, with 11 of the 13 years showing a positive return, according to SCFR calculations. And in the six months following a midterm election, the S&P 500 has averaged a 12.4% return across the same years, with all 13 years showing positive returns. The SPX is up nearly 11% year to date but has slipped about 3% from its highs this year, through Tuesday's close. See Kenny Polcari on Why 24,000 NDX is Possible, AI Volatility & SPX Equal Weight Strength

Many measures on the ballot sought to slow data center infrastructure construction. Last week, mega-cap technology and AI stocks came under pressure, including Intel (INTC), Amazon (AMZN), and Alphabet (GOOGL). See Crowded AI Trade Cracks as Tightening Liquidity Pressures Tech

More Regulation for Cryptocurrency?

The Commodity Futures Trading Commission (CFTC) is proposing regulations for crypto markets, but greater legislative scrutiny of crypto assets is possible after new legislators take their oaths, says StaySolvent founder Ray Salmond. Headed into the end of the year, cryptocurrency price volatility may have more to do with rotation into public offerings or trades tied to Federal Reserve interest rate action, Salmond says. He thinks "2027 could still be a bullish year" for crypto, despite the big Binance hack last week, which was the largest heist of crypto assets in history. Watch Clarity Act Fails Key Senate Vote: What's Next for Bitcoin, Other Crypto Assets?

Conflict With Iran and Energy

The status of the U.S.-Iran conflict, and oil prices, could change now that voters have cast their ballots; President Trump said before the election that the war could end after midterms.

After weeks of relative quiet, and headlines about potential diplomacy, the U.S. struck Iran's Qeshm Island Monday, according to media reports. The rising price of oil and fuel has permeated every industry. From $119 per barrel in March, West Texas Intermediate (WTI) crude has moved from $66 on February 27, the day before the U.S. and Israel began strikes in Iran, to a recent $93.

If conflict resolves, high crude prices could linger if the cost to insure vessels traveling through contested waterways remains high. The Amplify Commodity Breakwave Tanker Shipping ETF (BWET), up 4,234% year to date through Tuesday's close, has fallen about 21% from its recent all-time high. The S&P 500 Energy sector, up 49% year to date, is down 5% from its high. See Crude Oil Plunges on U.S.-Iran Reported Talks