Prediction: The Stock Market Will Soar After Midterm Elections
2026-10-25 02:45
•Bram Berkowitz •The Motley Fool
•••••••• ••••••••• Axe Cap view
Why Midterms Matter Less for JSE Investors
US midterm elections historically boost the S&P 500, but South Africa’s market reaction is less clear.
The US market tends to rally post-midterms, averaging around 15% gains over 12 months since 1950. Part of this comes from the political gridlock that limits disruptive reforms. For South African investors, this doesn’t translate directly. Our biggest stocks like Naspers and Prosus have US tech exposure but face local challenges. The rand often reacts more to domestic economic data and global commodity prices than US politics. If anything, USD/ZAR might weaken slightly if a Democrat-controlled Congress eases geopolitical tensions and global inflation risks. But don’t expect a straightforward boost to our banks or retailers like Standard Bank or Shoprite simply because of the US political calendar. This is a reminder not to blindly follow foreign market narratives when local factors dominate. The risk is that local inflation or policy missteps in South Africa overshadow any US-driven sentiment rally. this is just our opinion and not financial advice
Watch the rand closely around November as a weaker USD/ZAR could slightly ease imported inflation. Remain selective on JSE stocks with global earnings exposure like Naspers and Prosus but avoid chasing US momentum purely on midterm optimism.
- USD/ZAR
- Naspers
- South African inflation spikes
- Unexpected US policy shifts post-election
6/10
The article predicts that the stock market will experience strong performance following the midterm elections on Nov. 3, citing historical data showing the S&P 500 has been positive in the 12 months after every midterm election since 1950 with an average gain of roughly 15%. The author notes that while recent midterm cycles have shown more modest gains (4-7%), political gridlock following the elections could create a favorable near-term environment for stocks. Democrats are favored to control both chambers of Congress, which could end the Iran war and lower inflation, though it may create headwinds for AI-related stocks.
Our take is based on reporting first published by The Motley Fool.