With the midterm elections this Tuesday, many people may wonder whether stock market results are linked to the party in control of Congress.
A century of history suggests otherwise. Stocks have trended upward over the long term, whether Republicans, Democrats, or a mixed Congress was in power.
One reason is that stock prices ultimately depend on how well companies run their businesses. Congress does matter, but it is only one of many factors that affect the markets. Interest rates, consumer demand, oil prices, and global trade all play a role. So do presidential decisions, geopolitical events, natural disasters, and technological advances.
The chart below shows the hypothetical growth of $1 invested in the S&P 500 Index in January 1926, through 2025. The colors show which party controlled Congress: red for Republican, blue for Democratic, and purple for mixed control.
As the chart shows, the market has had periods of growth and periods of decline under Republican, Democratic, and mixed control. But no clear pattern shows better returns under either party.
Of course, none of this tells us how markets will perform in the near term. History simply shows that the market has rewarded long-term investors regardless of which party holds power.
Dimensional Fund Advisors has a short video on this topic, which you can view at this link.
In my view, it’s best to base investment decisions on your long-term goals rather than election results. Over time, patience and discipline have mattered far more than which party runs Congress.
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Source: Dimensional Fund Advisors, “The Market and Control of US Congress.” Growth of $1 is hypothetical and assumes reinvestment of income and no transaction costs or taxes. S&P data © 2026 S&P Dow Jones Indices LLC, a division of S&P Global. Past performance is not a guarantee of future results. Indices are not available for direct investment.