S&P 500 Could Win No Matter Who Wins the Midterms: 5 ETFs to Watch Under JPMorgan's 4 Scenarios

What happened

JPMorgan Market Intelligence analyzed four possible congressional outcomes and projected the S&P 500 could gain between 0.25% and 1.25% in three of them, with a Democratic sweep the most likely at 66% probability.

Confirmed

Global impact / market context

The analysis suggests the election winner may matter less for broad stock indexes than many investors assume, so portfolios might be better positioned around policy effects on specific sectors rather than around one predicted political result.

Analyst inference

JPMorgan assigns probabilities of 66% to a Democratic sweep, 26% to a split Congress, 7% to a Republican sweep and 1% to a Republican House with a Democratic Senate, based on prediction market data as of Nov. 1.

Analyst inference

What to watch

1. The State Street SPDR S&P 500 ETF Trust is described as the most direct way to gain broad exposure to JPMorgan's relatively calm outlook for the S&P 500. Confirmed
2. A Democratic sweep could renew concerns about artificial intelligence regulation and scrutiny of large technology companies, which may affect funds focused on that sector. Analyst inference
3. Investors may want to focus less on predicting the election winner and more on positioning portfolios for potential policy and sector effects, according to the article's summary of the findings. Proposed

Evidence

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