Post-Election Perspective
We know that periods of political change and sharp market swings can create understandable questions about what the developments mean for your portfolio. At Acumen Wealth, our role is to help separate short-term market reactions from the factors that influence long-term investment outcomes. With that in mind, we wanted to share our perspective on the election results, the market’s response during the first several trading days, and what we are watching going forward.
Election Results and Market Reaction
The election has produced a divided federal government, with Democrats winning control of the House and Senate while President Trump remains in the White House. This political arrangement may reduce the likelihood of major legislative changes without negotiation and bipartisan support. However, budget negotiations, trade policy, executive actions, and regulatory enforcement may continue to create periods of uncertainty.
The market response has been sharp and uneven. Stocks initially rallied as investors focused on reduced election uncertainty, potentially more restrained federal spending, falling oil prices, and lower Treasury yields. The following session brought a significant reversal, led by technology and artificial-intelligence-related companies, as investors reconsidered valuations, future capital spending, financing requirements, and possible regulatory scrutiny.
This is a useful reminder that the first market reaction following an election is not always the lasting one. Investors are simultaneously evaluating fiscal policy, inflation, energy prices, interest rates, economic growth, corporate earnings, and the sustainability of AI-related investment.
Interest Rates and Market Leadership
One of the more constructive developments has been the decline in Treasury yields. The 10-year Treasury yield fell slightly on the first full trading day following the election. Oil prices also declined sharply, helping to ease near-term inflation concerns.
Lower yields can support both stocks and bonds by reducing borrowing costs and increasing the value of future corporate earnings. However, the reason yields are declining matters. Moderating inflation would generally be constructive, while a significant deterioration in economic growth would be less favorable. At this point, the decline appears to reflect a combination of revised fiscal expectations, lower energy prices, and increased demand for government bonds.
We have also seen encouraging, although inconsistent, signs of broader market participation. Healthcare, industrial, consumer-oriented, and selected clean-energy companies participated in the initial rally. In our view, broader market participation could create a more balanced environment for equity returns, particularly following a period in which market gains have been concentrated among a relatively small group of large technology companies. We would like to see this participation persist and eventually include more small- and mid-cap companies before concluding that a lasting leadership change is underway.
Artificial Intelligence and Technology
Investors are also becoming more selective within the artificial-intelligence ecosystem. The market is increasingly distinguishing between companies already converting AI demand into earnings and cash flow and those whose valuations depend more heavily on future data-center construction and continued access to affordable capital.
AMD provides one example of how strong reported business results do not necessarily translate into sustained short-term gains. According to the company’s third-quarter 2026 earnings release, total revenue increased 45% year over year, while data-center revenue increased 97%. Despite those results, the company’s stock-price reaction highlighted investor concerns about AI valuations and capital-spending expectations.
This does not necessarily mean AI demand is weakening. Rather, investors are asking more demanding questions about returns on capital, power availability, financing costs, regulatory approvals, and whether future growth can justify current valuations. Greater selectivity is normal as a major investment cycle matures, although it can produce substantial short-term volatility.
Portfolio Perspective
Importantly, volatility by itself does not mean that the economic or corporate outlook has materially deteriorated. The post-election movement appears to be more of a repricing of policy expectations, interest rates, energy prices, and AI-related valuations than evidence of a sudden breakdown in the broader economy.
History provides some perspective, although past performance is never a guarantee of future results. Since 1938, the S&P 500 has generated positive returns in 95% of the 12-month periods following midterm elections. More specifically, since 1953, periods when a Republican president served alongside a Democratic-controlled Congress have produced an average annual S&P 500 price return of approximately 5%. While these historical trends are encouraging, market performance has varied considerably, and political outcomes alone are not reliable predictors of future returns. Ultimately, economic growth, corporate earnings, inflation, and Federal Reserve policy are likely to have a greater influence on the direction of markets than which party controls Washington.*
At this stage, we do not believe the election outcome alone calls for significant portfolio changes. The longer-term direction of markets will continue to depend primarily on economic growth, corporate earnings, inflation, interest rates, credit conditions, and Federal Reserve policy.
We will be watching whether Treasury yields stabilize at lower levels, market participation broadens, earnings growth expands across sectors, and small- and mid-cap stocks begin to participate more meaningfully. We will also monitor AI capital-spending plans, credit markets, and upcoming budget and government-funding negotiations.
Overall, markets are working through several major developments at once, and the process is unlikely to occur in a straight line. The decline in interest rates and signs of broader market participation are encouraging, while the reversal in technology shares highlights the importance of valuations and selectivity. For long-term investors, maintaining a disciplined and diversified strategy remains more important than repositioning portfolios around individual political or market headlines.
At Acumen, our mission remains simple: protect legacies, grow assets, and always put you first®. Please don’t hesitate to reach out with any questions or comments.
* Sources: Fidelity Investments, How Did Midterm Elections Affect Stocks? (2026); RBC Wealth Management, Midterms, the Market and What Matters (2026). Historical performance reflects S&P 500 Index price returns, excluding dividends. The index is unmanaged, does not reflect investment advisory fees or expenses, and cannot be invested in directly. Past performance is not indicative of future results.
The views and opinions expressed in this commentary are those of Acumen Wealth Advisors, LLC as of the date of publication and are subject to change without notice. This commentary is provided for general informational purposes only and does not constitute individualized investment advice or a recommendation to purchase or sell any security.
Information has been obtained from sources believed to be reliable; however, Acumen does not guarantee its accuracy, completeness, or timeliness. Market conditions, economic developments, and investment results may differ materially from the expectations or opinions expressed herein.
Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results. Diversification does not ensure a profit or protect against loss in declining markets. Investors should consider their individual financial circumstances, objectives, and risk tolerance before making investment decisions.
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