With the 2022 midterm elections just a week away, polls and prediction markets point to a divided government as the most likely outcome. See below for our comments on how mid-term elections have impacted the markets historically and considerations for the economic environment this time around. 

Equities typically perform well-following midterm elections as political uncertainty declines; the markets prefer certainty to uncertainty. During the last 90 years, the S&P 500 Index has produced a median return of 3% through year-end and 17% during the 12 months following midterm elections. Historically, equity market returns have usually been slightly stronger under a divided government versus periods when one party has unified political control. However, this time around, it's important to keep in mind other risks facing the US & global economies such as high inflation, generally rising interest rates, lingering supply chain issues, and unforeseen geopolitical risks.