Evercore Names the 3 Conditions That Could Wipe Out S&P 500’s Gains

Nasdaq 100 futures fell nearly 1.5% as Democratic sweep odds hit 95%. That sweep is the first of 3 conditions in Evercore ISI’s worst-case midterm scenario.

If they play out, Evercore’s worst case puts the S&P 500 at 6,800 by year-end. That would erase nearly all of the index’s 2026 gains.

Evercore’s Bear Case Needs More Than a Democratic Sweep

The S&P 500 has already lost about $500 billion in market value within 2 hours, The Kobeissi Letter said.

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BREAKING: Nasdaq 100 futures extend losses to nearly -1.5% on the day as the odds of a Democrat "sweep" rise to 95%.

The S&P 500 has now erased -$500 billion in market cap over the last 2 hours. pic.twitter.com/YEvihBEqLM

— The Kobeissi Letter (@KobeissiLetter) November 4, 2026

Still, a sweep alone would not take the index to 6,800. Evercore’s report also requires a disputed result and military escalation in Iran before the new Congress sits in January.

Evercore ties the Iran risk to oil, which it calls the biggest threat to the economy.

“The exception to ‘buy the dip’ is our view that, should ‘kinetic escalation’ with Iran drive [West Texas Intermediate crude oil] above $120/bbl for a prolonged period (a month or more) or should the oil price spike to the all-time high of $147/bbl, that an economic slowdown, credit widening and a longer and deeper market turndown would result,” the firm said.

West Texas Intermediate (WTI) crude traded near $94.40 a barrel on Wednesday. It would need to rise about 27% to cross Evercore’s $120 line. The US also reportedly struck Iran’s Qeshm Island on Monday. However, prices eased today as investors await the results of the US midterm elections.

Without that escalation, Evercore’s numbers change sharply, even under a Democratic Congress.

Without Escalation, Evercore Sees a Dip Worth Buying

The closest case to the worst one keeps the Democratic sweep and the disputed vote but drops the escalation. Evercore puts the S&P 500 at 7,650 there and calls any initial decline a buying opportunity.

That 850-point gap is the cost Evercore assigns to escalation.

Its base case, a divided Congress with an undisputed vote, holds at 7,750. In the bull case, Republicans keep both chambers, the vote goes undisputed, and Iran moves to negotiate. A sharp fall in oil prices would then lift the index to 8,400.

A Democratic Congress would still face the White House. Trump told CBS News on Tuesday, before polls closed, that he would veto Democratic bills if necessary.

History offers 3 precedents for a Democratic Congress under a Republican president. The 1986, 1990, and 2006 midterms each produced that split. The S&P 500 averaged a 10.9% gain the following year, BeInCrypto reported.

Still, CFRA’s Arun Sundaram calls a Democratic sweep the worst case for markets. 

Evercore, for its part, keeps its preferred portfolio focused on AI. It remains overweight information technology, communication services, and consumer discretionary stocks.

The firm also expects a Federal Reserve rate hike on December 9. It estimates the largest cloud companies must raise capital for $1.3 trillion in 2027 spending.

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