Highlights

The contest for the U.S. Senate remains close, but prediction markets now give Democrats a modest lead. Traders on Kalshi place Democrats' chances at about 54%, while Polymarket shows roughly 59%. Rising energy prices and recent polls have driven much of this shift, even as Republicans still defend more of the contested seats and retain a meaningful path to retaining control.

Sentiment Analysis

• The overall sentiment is mixed-to-positive for Democrats, reflecting cautious optimism among traders and poll respondents. Use the visual bar below to represent the sentiment intensity for Democrats' chances.

Article Text

The battle for control of the U.S. Senate is still competitive, but traders in prediction markets are increasingly favoring Democrats. On Kalshi, speculators now assign Democrats roughly a 54% probability of capturing the Senate, while Polymarket places that likelihood near 59%. Those figures mark a notable improvement for Democrats compared with earlier in the year, though they do not make a decisive forecast.

Republicans enter the November elections defending majorities in both the House and Senate, and the upper chamber has long been considered the more difficult prize for Democrats. Of the 33 Senate seats up this cycle, Republicans currently hold 20, meaning Democrats would need to flip multiple Republican-held seats — including some in states where former President Donald Trump carried by double digits in 2024, such as Alaska, Texas and Ohio — to win a majority.

Prediction market odds have shifted over the year in response to geopolitical events and their economic consequences. Before the U.S.-Iran conflict escalated at the end of February, markets on Kalshi and Polymarket had given Republicans roughly a 60% chance of holding the Senate. As tensions rose and energy prices climbed, those odds moved toward Democrats: higher gas prices corresponded with declines in Trump's approval and improved Democratic prospects. By April, markets briefly showed Democrats with the edge, although the GOP regained ground in May and into the summer as tensions eased and fuel prices moderated.

More recently, however, the outlook has again tilted toward Democrats. U.S. oil prices have climbed above $100 per barrel, national gasoline averages exceed $4 per gallon, and diesel prices are at record levels. Traders on prediction platforms now anticipate further increases in fuel costs this year, a trend that has correlated with Democratic gains in market pricing. At the same time, a series of reputable polls this week have suggested a favorable environment for Democratic candidates: a New York Times/Siena poll found likely voters nationwide leaning toward Democratic congressional candidates by nearly nine percentage points.

Even with the improving signals for Democrats, Republicans still possess structural advantages in the number of seats they defend and a realistic path to retaining control if they can hold key states. Market movements reflect changing expectations rather than certain outcomes: prediction markets indicate a modest Democratic edge but not an assured takeover. Voters, economic conditions, and campaign dynamics between now and November will continue to influence those probabilities.

Disclosure: CNBC maintains a commercial relationship with Kalshi that includes customer acquisition and a minority investment.

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