According to the CITIC Securities Research Report, the US midterm elections are imminent on November 3, 2026, and we are conducting a three-level analysis around the “winner - market” narrative. First, historical review shows that the S&P 500 returns were all positive in the year after the 20th election from 1946 to 2022, with an average of +14.4%, and the differences between groups under the three categories were far less than the dispersion within the group. “belonging to the two houses” lacked independent pricing power for US stocks. Second, in terms of the election situation, it is predicted that the market and poll data agree that the “Democratic Party controls both houses” as the benchmark scenario, splitting the National Assembly as the secondary replacement. However, the Senate seat estimates show that the Democratic Party needs a net increase of 4 seats, and most of the 7 Toss-Up states currently hold seats. Combined with the Republican Party's advantage in terms of cash and advertising in party organizations, the Republican Party still has a realistic path of maintaining the Senate. Third, policy differences between the two parties are significant and consensus is limited. The industry's influence depends more on the certainty of “whether the policy can be implemented” — splitting the National Assembly is the weakest response policy, and only when the two parties control the two chambers, their separate policies form a highly flexible directional exposure.

According to the CITIC Securities Research Report, the US midterm elections are imminent on November 3, 2026, and we are conducting a three-level analysis around the “winner - market” narrative. First, historical review shows that the S&P 500 returns were all positive in the year after the 20th election from 1946 to 2022, with an average of +14.4%, and the differences between groups under the three categories were far less than the dispersion within the group. “belonging to the two houses” lacked independent pricing power for US stocks. Second, in terms of the election situation, it is predicted that the market and poll data agree that the “Democratic Party controls both houses” as the benchmark scenario, splitting the National Assembly as the secondary replacement. However, the Senate seat estimates show that the Democratic Party needs a net increase of 4 seats, and most of the 7 Toss-Up states currently hold seats. Combined with the Republican Party's advantage in terms of cash and advertising in party organizations, the Republican Party still has a realistic path of maintaining the Senate. Third, policy differences between the two parties are significant and consensus is limited. The industry's influence depends more on the certainty of “whether the policy can be implemented” — splitting the National Assembly is the weakest response policy, and only when the two parties control the two chambers, their separate policies form a highly flexible directional exposure.