Business · Markets · 2 hrs ago
US midterms could shape Indian markets, but yields and oil remain risks
The US midterm election outcome could influence global markets and the near-term outlook for Indian shares.
Historical figures show the S&P 500 has often risen after midterms, but analysts caution that markets have already captured much of the typical rally.
Indian shares gained an average of 4% over six months and 26% over 12 months in periods examined since 1998, although returns were negative on two occasions.
India’s performance will also depend on company earnings, share valuations and foreign investment flows.
Analysts say higher bond yields and oil prices could limit market gains by adding inflation and economic-growth pressures.
For India, the election may have greater geopolitical effects: Democratic control of Congress could bring more scrutiny of tariffs and immigration, while existing trade and diplomatic tensions may persist.
A renewed Iran conflict could raise energy costs and pressure India’s rupee and balance of payments, but the sources give no specific next step beyond watching these risks and market conditions.
The US midterm election outcome could influence the near-term direction of global and Indian equity markets, analysts said.
Historical data cited by Emkay Global show the S&P 500 gained an average of 6 per cent in the 60 trading days after midterms, but analysts cautioned that this cycle may differ.
Indian equities returned an average of 4 per cent over six months and 26 per cent over 12 months in the periods examined since 1998, though results were inconsistent.
Elevated bond yields and crude oil prices could limit market gains and increase inflation and growth risks.
Analysts said Indian market performance will also depend on corporate earnings, valuations and foreign capital flows.
- Who
- Indian and global equity markets, and analysts assessing the potential effects of the US midterms.
- What
- The election outcome could affect market direction, while bond yields and crude oil prices remain risks.
- When
- The US midterm elections are scheduled for November; the article was published on November 2, 2026.
- Where
- The United States and India, with implications for global markets.
- Why
- Election outcomes may affect policy and geopolitical risks, while yields and oil prices could weigh on markets.
This story does not have two clearly opposing sides.
The period examined for Indian market returns begins, as foreign investors were allowed greater access to the domestic market.
Emkay Global issued a note on the potential implications of the US midterms.
The US midterm elections are due to take place.
- Indian equities, six-month average return
- 4 per cent
- Indian equities, 12-month average return
- 26 per cent
- S&P 500, 60 trading days after midterms
- Average gain of around 6 per cent
- S&P 500, 120 trading days after midterms
- Average gain of 12 per cent
- S&P 500, 180 trading days after midterms
- Average gain of 17 per cent
What people are saying
Equities have already captured a larger-than-usual share of the typical midterm rally, while elevated bond yields and oil prices leave markets more vulnerable to inflationary pressures and a potential slowdown in economic growth
The political gridlock keeps spending in check and is good for bonds
rising bond yields globally pose the biggest risk to equity markets