JPMorgan Gives Democratic Sweep 66% Odds; S&P 500 Best Case Is GOP Hold

JPMorgan’s four-outcome analysis of the 2026 midterms gives a Democratic sweep a 66% probability, while its most favorable S&P 500 outlook depends on Republicans retaining both chambers.

The bank pairs each possible congressional lineup with a probability and an S&P 500 range. Its estimates reflect different potential effects from regulation, federal spending and long-term Treasury yields.

JPMorgan assigns a 7% probability to Republicans keeping control of both chambers and projects a 1% to 1.25% S&P 500 gain in that case. The scenario carries less immediate risk of new congressional regulation and limited added technology policy pressure. Risks include higher deficit spending and long-term Treasury yields. JPMorgan also identifies the possibility that Trump may continue military action against Iran.

A Democratic sweep is the most likely outcome in the bank’s analysis, but its projected S&P 500 range is a 0.25% decline to a 0.5% gain. Concerns about stricter artificial intelligence rules and limits on data center construction could weigh on AI-related stocks. Lower deficit spending could put downward pressure on long-term yields. Some executives linked to political donations to Trump could face greater risk of congressional investigations.

JPMorgan gives a 26% probability to Democrats winning the House while Republicans retain the Senate. That divided arrangement carries a projected S&P 500 gain of 0.5% to 1%. It could constrain major legislation and additional government spending, while some companies and their leaders could still face congressional investigations.

The least likely case, at 1%, is a Republican House alongside a Democratic Senate. JPMorgan projects a 0.25% to 0.75% S&P 500 gain under that lineup and flags budget disputes that could lead to a government shutdown.