Two elections. Two political wildcards. Here’s what it could mean for your portfolio.

Investors are preparing for a potentially consequential week on both sides of the Atlantic. Today, 3 November, Americans head to the polls for the US midterm elections, followed just one day later by South Africa’s municipal elections on 4 November.

And while these elections are taking place thousands of kilometres apart, both could have significant implications for financial markets.

In the US, investors are weighing the possibility of a divided Congress and what that could mean for Donald Trump’s economic agenda. Closer to home, South Africa’s Government of National Unity (GNU) faces an important political test, with potential consequences for investor confidence and the rand.

So what outcomes should investors be preparing for, which sectors could be most affected, and where might opportunities emerge?

The prediction markets believe these elections are signalling a political shake-up

While traditional polling measures voter preferences, prediction markets such as Kalshi and Polymarket offer a continuously updated view of how traders are pricing the possible election outcomes.

Despite public polling suggesting tight races, betting markets aggressively favour a Democratic shift. As of late October 2026, Kalshi prices a Democratic sweep of both the House and Senate at 63%, followed by a 29% chance of a divided Congress with a Democratic House and a Republican Senate.

Let’s break down the chambers:

• The House: Prediction markets reflect near-certainty of a chamber flip. Both Kalshi and Polymarket have recently priced Democratic control of the House between 85% and 91%.

• The Senate: The upper chamber is more contested. While Kalshi’s combination contracts favour a Democratic sweep, individual Senate contracts on Polymarket have frequently fluctuated near a 50/50 split or shown slight Republican advantages depending on the trading snapshot.

What a Democratic victory could mean…

If Democrats gain control of one or both chambers of Congress, Trump’s ability to advance his legislative agenda could become significantly more constrained.

But the consequences would extend well beyond Washington’s political battles. A change in congressional control could reshape the administration’s priorities, with implications for regulation, trade policy and financial markets.

Under a Democratic House majority, opposition lawmakers would gain control of key congressional committees and subpoena powers. This could increase scrutiny of the Trump administration, including investigations into regulatory decisions, government spending, cabinet appointments, and potential conflicts of interest.
For Trump, this could mean spending much of his final two years responding to congressional investigations and political challenges rather than advancing new legislation.
Economically, a divided Congress could make sweeping domestic reforms, such as further tax cuts or major deregulation bills, more difficult to pass. The administration might consequently place greater emphasis on executive action and foreign policy, although both would remain subject to legal and institutional constraints.

The GNU faces its next big test. Could the rand feel the pressure?

Closer to home, SA holds its local government elections on 4 November. After the historic May 2024 national elections, the African National Congress (ANC) lost its outright majority, forcing the creation of a 10-party Government of National Unity (GNU) alongside the Democratic Alliance (DA) and others.

The 2026 municipal elections are the first major referendum on this coalition and the economic implications extend well beyond the municipal results, particularly as South Africa looks toward the next national elections in 2029.
If voters punish the ANC or DA for participating in the GNU, or if tensions escalate over municipal control in major economic centres, it could further strain the national coalition.

Conversely, an outcome that reinforces confidence in the GNU’s durability could improve investor sentiment, potentially supporting the rand and reducing South Africa’s political risk premium.

Three investment themes to watch beyond election day

For investors, the important question isn’t simply who wins next week’s elections, but how the results could change the investment landscape over the next two years.

With that in mind, there are three core investment themes I’d watch:

• Energy and crude prices: Investors often overestimate the impact of US elections on the oil market. While domestic drilling leases and strategic reserve policies will be hotly debated, crude oil pricing remains fundamentally anchored to global demand and OPEC+ production limits. However, this time could be different. The biggest driver of energy prices right now is the Iran war. If Trump is too distracted by domestic issues, he could be open to a deal that ends the war.

• Price in regulatory gridlock: A divided Congress could make sweeping antitrust or financial legislation more difficult to pass. This might improve legislative predictability for certain sectors and merger activity, although executive and regulatory actions could still add uncertainty.

• Position for emerging market yield: Political gridlock in Washington could prompt investors to reassess opportunities in emerging market sovereign bonds. If South Africa’s GNU shows resilience in the November elections, local government debt could become more attractive, especially if improved political stability reduces the country’s risk premium.

Is your portfolio ready for the next political chapter?

Investment decisions should take account of your existing portfolio, financial position, objectives and risk tolerance. With two important elections approaching, now may be a good time to review how your investments are positioned for changing political and economic conditions.