Investors expected Democrats to win the House and Republicans to keep the Senate during the midterm elections.
But the election opened the door to uncertainty for investors going forward.
That's because a blue takeover of the House might lead to a larger number of Democratic presidential hopefuls in 2020, Tina Fordham, chief global political analyst for Citi Research, told CNN International anchor and correspondent Julia Chatterley on "Markets Now" on Wednesday.
"That makes our jobs more difficult, and investors' jobs more difficult, in trying to game out what types of policies might come from a Democratic challenger," Fordham said.
In the meantime, the market will have to guess which of President Donald Trump's policies will receive support from Democrats.
Congress could approve a deal to bring down prescription drug prices, Fordham said. But Democrats will likely prevent an overhaul of the Affordable Care Act. And though they agree with the president on the need for an infrastructure bill, taking action is easier said than done.
On infrastructure, "it's all going to come down to financing," she noted. But an infrastructure deal would be an important driver of a continued bull run.
"We better get an infrastructure deal if you're long stocks here, particularly in tech [and] industrials," said Darius Dale, senior macro analyst for Hedgeye Risk Management.
Dale explained that as economic growth and corporate profits inevitably slow, an infrastructure deal would be needed to boost those stocks.
Another question is whether Democrats will help spark a resolution to the trade war with China.
Fordham doesn't see that happening.
"Democrats are historically more apprehensive about free trade and in this case are likely to support a continued strong line on China trade," she said. "Where I think House Democrats might push back on the president's trade agenda is with regard to Europe and Japan, traditional US allies." But she doesn't think the president will be open to those efforts.
Dale said that "Trump and Xi better partner up" because markets are already pricing in a trade agreement. The president has claimed that Chinese President Xi Jinping is eager to make a deal during their expected meeting on the sidelines of the G20 summit of global leaders later this month.
"Markets Now" streams live from the New York Stock Exchange every Wednesday at 12:45 p.m. ET. Hosted by CNN's business correspondents, the 15-minute program features incisive commentary from experts.
You can watch "Markets Now" at CNN.com/MarketsNow from your desk or on your phone or tablet. If you can't catch the show live, check out highlights online and through the Markets Now newsletter, delivered to your inbox every afternoon.
- Analyst: Investors should prepare for six more years of Trump
- Investors are preparing for a downturn
- Analyst: Miracle if Atlantic alliance survives Trump
- Analyst: Trump had hollow victories at G20
- CNN analyst: Trump is hamstringing his team
- What's rattling investors?
- Alan Greenspan: Investors should prepare for the worst
- The big fear spooking investors
- Investors are hypersensitive to politics
- QAnon-believing 'conspiracy analyst' meets Trump in the White House