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Wednesday, November 4, 2026 |
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The Last Page.
The last page, first.
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Trump Warned of 1929. Will the Midterm Streak Hold?
Democrats won both chambers of Congress overnight, after President Trump warned their win would bring a depression. Now the market’s midterm streak runs into a war and a Fed leaning toward a hike.
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© 2026 APR Insights. All rights reserved. Tax benefits depend on individual circumstances. Always consult a tax professional. Not all retirement accounts qualify. This is an advertisement.
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The story
Democrats won both chambers of Congress overnight. The AP called the Senate late Tuesday, after Josh Turek won in Iowa, and the House early Wednesday. Democrats flipped at least seven Republican Senate seats, Texas and Kansas among them.
On Oct. 26 President Trump told a rally in Corinth, Mississippi, what a Democratic win would bring. “You will have a 1929-style economic depression,” he said.
The stock market’s own record points the other way. Barchart, a market-data firm, counted it this week. In all 19 midterm years since 1950, the S&P 500 was higher 12 months after the end of October. The average gain was 16.6%, whichever party won.
Futures gave that record its first test overnight. Nasdaq-100 futures fell as much as 2.4% on the results, then climbed back. By 3 a.m. Eastern, Dow futures were up about 240 points.
That record is the one your 401(k) lives on, and this year it has three things to get past.
The first is a war. The U.S. and Iran have been at war since Feb. 28.
On Monday American forces struck Iran’s Qeshm Island, in what U.S. officials called a defensive move. Brent crude, the world oil benchmark, settled Tuesday at $103.60 a barrel, its lowest close in four weeks.
The second is the Fed. Chairman Kevin Warsh held rates steady last week, but two officials voted to raise them. By Tuesday, futures traders put the odds of a hike on Dec. 9 at about three in four.
The third is Washington itself, and its bills. Trump told Fox News over the weekend that if Democrats won, “I guess I’ll become Mr. Veto.” The national debt passed $40.5 trillion the day of his rally.
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Washington now faces two years of divided government, with gold about 30% below its January record. A free report on guarding your purchasing power through it:
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From January, every budget a Democratic Congress passes can die on a Republican President’s desk. Neither side has to give an inch until January 2029.
America lost its last AAA rating in May 2025, when one party ran the House, the Senate and the White House.
And the debt is about $500 billion from its legal limit.
If you’re 60, 65 or 70, two years of standoffs isn’t something you can wait out. The Great Gold Reset, a free report, shows how to protect your purchasing power in about 15 minutes. |
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Interest on that debt topped $1 trillion in the fiscal year that ended in September. Every rate hike makes the next bill bigger.
So the streak meets its hardest test in years. We ran both endings forward to next October, when the 12 months are up.
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If the Fed stops at one hike
Our best-case projection: October 2027
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If the Fed keeps raising
Our worst-case projection: October 2027
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Best case
OCTOBER 2027. The streak made it to 20. Like every year after a midterm on record, the S&P 500 ends October above where it closed a year earlier.
The Fed raised rates once in December and then waited. Talks with Tehran, the “negotiated settlement” Vice President JD Vance said he hoped for, pulled oil well back from $100.
Washington did what divided Washington tends to do. Trump vetoed, Congress held hearings, and very little became law. Markets have long been comfortable with that kind of standoff.
Your 401(k) statement shows it: at the 16.6% average, an index fund worth $400,000 last Halloween is worth about $466,000 now.
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Worst case
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OCTOBER 2027. For the first time since 1950, the S&P 500 ends the year after a midterm lower than it started.
The Fed raised rates on Dec. 9 and kept going into spring, because oil never fell back below $100. The war with Iran dragged on through the winter.
Each hike made the debt more expensive to carry, and the interest bill kept growing past $1 trillion. Mortgage rates climbed with it.
In Washington, Mr. Veto and the new Congress spent the year blaming each other for prices. The 1929 clip from Corinth runs on every money show.
Your statement sits below where it stood last Halloween. The bank down the street pays more on a CD than your index fund made all year.
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Congress changes hands in January. For gold you can hold and pass down to your children, a free playbook on which coins qualify:
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How it ends
You get a 20th straight post-midterm gain unless costly oil turns December’s rate hike into a string of them.
Election results alone have never broken this streak. Divided government passes little, and stocks have lived with that for decades.
The test that looks most like this one came in 2011. Republicans had just taken the House from President Obama’s party. Then a fight over the debt limit cost America its top credit rating from Standard & Poor’s.
Stocks fell nearly 20% between spring and fall. The S&P 500 still ended October about 6% above its level a year earlier.
Rate hikes have not broken it either. The Fed kept raising rates after the 2022 midterm. Stocks still finished the next 12 months higher, because inflation was already falling.
This time oil above $100 is pushing prices up. One hike on Dec. 9 is already expected. A string of them would land on a war and a trillion-dollar interest bill. That is how the streak finally breaks.
For your 401(k), angry headlines from Washington have been survivable before. The date to circle is Dec. 9, when the Fed shows how far it means to go.
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The Fed’s decision and its new rate forecasts on Wednesday, Dec. 9, at 2 p.m. Eastern. One hike and a pause keeps the streak on track. Forecasts showing more hikes in 2027 mean the worst case has started.
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