Senate Control Tossup as Iran Conflict Weighs on GOP Odds

Traders on prediction platforms Kalshi and Polymarket now view the battle for the U.S. Senate as a tossup, with both parties holding roughly equal chances of securing the upper chamber. While Democrats are currently viewed as favorites to flip control of the House of Representatives, the Senate race has tightened significantly over the last few months. The shift in probability is largely attributed to the political fallout from the U.S.-Iran war. Republican odds of maintaining their majority have declined from a 67% probability recorded in January and February, as President Trump's approval ratings have hit their lowest levels of his second term. Despite the current parity in the markets, Democrats face a difficult path to a majority. The party would need to secure victories in several states where Trump won by double-digits in 2024, including Texas, Ohio, Iowa, and Alaska. From a macro perspective, these political dynamics may be influencing foreign policy. Bank of America economist Claudio Irigoyen noted that the combination of falling approval ratings and precarious Senate odds is creating mounting incentives for the administration to reach a resolution in the conflict with Iran, evidenced by a recent push for a diplomatic deal.