Election Day 2018

Four hundred and thirty-five seats in the House of Representatives are up for grabs, while 35 of the 100 Senate seats are also on the ballot. Betting markets have suggested that Democrats will gain control of the House, but Republicans will keep their grip on the Senate. The vote is expected to draw historic numbers to the polls and could spark further volatility in the wider financial markets.

Schwab's Vice President of Legislative and Regulatory Affairs, Michael T. Townsend thinks that a Democratic victory in the House is what the markets are expecting. He adds that if Democrats win a majority in the House, expect a lot of investigations in 2019 of the president and efforts to roll back some of his legislative accomplishments of the past two years. But he points out that those efforts are not likely to succeed because of a narrowly divided Senate and the fact that the president still wields the veto pen. That’s why Michael thinks the markets are anticipating more gridlock in 2019, and he does not expect a big market reaction to the election outcome.

Investor's Business Daily: Tuesday's midterm elections likely will be a market driver later this week, which could make for a relatively subdued Tuesday session.

Some stock market pundits argue that GOP control might be best for Wall Street. Historical data suggest a divided Congress spurs the best stock market returns.

Let the market's collective wisdom sift through the election returns. Dow Jones futures could be volatile Tuesday night, but that's not necessarily indicative of how stocks will trade Wednesday. Keep in mind that Dow Jones futures crashed 800 points on election night when Donald Trump pulled off the upset, but rallied for a 1.4% gain Wednesday.

What's at stake for the military

Seeking Alpha: Midterms and Markets