Trump's second term has seen approval ratings fall to the mid-to-high 30s amid persistent inflation concerns and the ongoing Iran conflict, positioning the 2026 midterms as a referendum that favors Democratic gains in Congress. This environment boosts trader confidence in Democratic prospects for 2028, reflected in the 63.5% implied probability for the party to win the presidency. Potential Democratic contenders such as Jon Ossoff, Alexandria Ocasio-Cortez, and Gavin Newsom benefit from early positioning, while Republican frontrunner JD Vance contends with the challenges of an unpopular administration. Upcoming midterm results and any shifts in economic or foreign policy conditions remain key variables that could alter these probabilities before the 2028 contest.