KOSPI Outlook Shifts on Upcoming US Midterm Election
International operators should prepare for potential market volatility based on the electoral outcomes in the United States.
Updated on Oct. 26, 2026 in Economic Indicators
Live Poll
Do you believe stock market performance is driven more by election results or corporate earnings?
Daishin Securities projects KOSPI performance volatility tied to upcoming US midterm election results. The firm anticipates significant index fluctuations based on the likelihood of Democratic or Republican control over Congress.
Why it matters
Operators in international markets face potential shifts in Treasury yields and dollar stability, which historically impact cross-border investment and capital costs. Understanding these scenarios is critical for companies reliant on South Korean market stability or US fiscal policy shifts.
Daishin Securities estimates a 63% probability of a Democratic sweep in the US midterms, with the KOSPI index potentially reaching 6,700 points in Q4 2026 under that scenario. Conversely, a Republican sweep carries an 8% probability and could push the index floor to 4,950.
The players
Daishin Securities
A South Korean financial services firm providing investment banking and brokerage services.
The details
The firm utilized 200,000 simulations and historical performance data from 1950 to build its forecast. Analysts expect a Democratic sweep to stabilize the US dollar and Treasury yields, whereas a Republican victory could trigger short-term market pressure through fiscal expansion. The outlook also incorporates a projected 34% increase in KOSPI earnings per share for the coming year.
Timeline
1950: Start of S&P 500 midterm election data tracking.
September 1, 2026: Polymarket Blue Sweep probability stood at 50.5%.
October 24, 2026: Polymarket Blue Sweep probability reached 66.5%.
November 3, 2026: Date of US midterm elections.
Q4 2026: Forecast window for KOSPI index performance.
Market Landscape
This forecast follows historical S&P 500 performance in midterm elections since 1950, which has consistently shown positive index movement. By linking this trend to KOSPI projections, the report highlights the continued sensitivity of global emerging markets to US political cycles.
Operators with exposure to Korean markets should monitor currency and Treasury yield fluctuations as the November 3 election approaches. Firms should prepare for volatility in capital costs by stress-testing budgets against the potential index floor of 4,950.
The takeaway
Market forecasts indicate that US election outcomes remain a primary driver of KOSPI sentiment through the end of 2026. Operators should track the 34% projected increase in KOSPI earnings per share as a benchmark for local business health heading into the next quarter.
Further reading
For broader trends affecting international markets, see our coverage of Economic Indicators.
Source note: This article includes information reported by 조선일보.
Live Poll
Do you believe stock market performance is driven more by election results or corporate earnings?
