Midterm election results? Markets are more worried about the Federal Reserve

With control of Congress still up for grabs Wednesday following Election Day, some market analysts are signaling that a political gridlock by Republicans may be a positive for Wall Street and the U.S. economy.

Historically, the stock market has performed well both after midterms and also when control of government is divided between parties. The markets have risen in the year following the last 18 midterms — going back to 1950 — according to Barry Gilbert and Jeffrey Buchbinder of LPL Financial.

Markets typically perform well under a divided government because gridlock decreases the likelihood of Congress passing sweeping fiscal legislation. Investors may be cheering the end of uncertainty surrounding the midterms, or showing their anticipation of balanced policy priorities when the parties are sharing power.

"Gridlock is good from a market perspective because of the fact that we don't have to worry about any major tax reform or major regulations over the next two years," Key Advisors Group co-founder Eddie Ghabour said.

However, some other experts believe that investors are paying much closer attention to the Federal Reserve than the makeup of the next Congress.

"The economy's performance and the Federal Reserve's policies to shape its path are likely to matter more than the election results to investment returns, in our view," the strategists said. "This greater importance of the economy and Fed policy remains the focus of our guidance."

Source: Goldman Sachs, LPL Financial, Fox Business, Bloomberg