Divided gov't to bring 'some stability' to markets -investor

STORY: Split control of U.S. Congress following the midterm elections may provide a tailwind for stocks at the end of a bruising year, but inflation and the Federal Reserve are likely to remain the market’s main drivers, investors said.

Republicans officially won a majority in the House of Representatives on Wednesday, setting the stage for two years of divided government as President Joe Biden's Democratic Party maintains control of the Senate.

Historically, stocks have done better under a split government when a Democrat is in the White House: Average annual S&P 500 returns have been 14% in a split Congress under a Democratic president, according to data since 1932 analyzed by RBC Capital Markets. That compares with 10% when Democrats controlled the presidency and Congress.