For markets, bond yields may matter more than midterms
TLT•Leuthold Group strategists say Treasury yields are likely to shape markets more than the 2026 midterm elections. The US 10-year yield edged down to about 5.22% as major US indexes were modestly lower.
1. Yields in focus
Leuthold Group strategist Chun Wang said investors should pay closer attention to Treasury yields than the outcome of the 2026 midterm elections. Wang said stocks have historically performed well after midterms, particularly under divided government, but argued that this year resembles the 2018 and 2022 cycles, when Federal Reserve tightening drove markets.
2. Bond market signals
Unlike in typical midterm years, 10-year Treasury yields have climbed sharply ahead of the election. Wang attributed the increase to persistent inflation, large fiscal deficits, heavy Treasury issuance, AI-related borrowing and elevated oil prices. Leuthold sees a possibility that long-term yields are nearing a peak, which could provide relief across asset classes.
3. Market snapshot
The US 10-year Treasury yield edged down to about 5.22%. Major US indexes were modestly lower, with industrials the weakest S&P 500 sector and energy among the gainers.
