The midterm elections outcome that saw the Republicans maintain control of the Senate and the Democrats take control of the House is likely to fuel a broad U.S. and global financial markets bounce.

President Donald Trump has hailed the election as a “tremendous success." But gridlock in Washington caused by a now split government will stall the White House’s bid to deregulate banking and industry, limiting the relief rally.

As America woke up on Wednesday to the news of the results, which had been widely expected, U.S. stock futures immediately rose.

I think this buoyancy in U.S. financial markets is likely to last into the year-end.

This U.S. bounce can also be expected to positively impact global financial markets, given the high correlation between Wall Street and risk assets elsewhere.

We saw this across Europe with the UK’s FTSE 100 index, Germany’s DAX and France’s CAC 40 all gaining more than 1 per cent in morning trading.

That said, it can be reasonably assumed that this rally will be relatively short-lived as it could then be offset by legislative gridlock in Washington.

This will halt deregulation legislation, which in turn will hurt sectors such as banking, energy, industrials, and smaller companies that stood to gain most from looser controls. Pharmaceuticals may suffer as the Democrats seek to bring down drug prices.

The gridlock also means that fiscal policy will largely be maintained as it is, with no significant changes to spending or taxation.

Portfolio diversification is the best way for investors to mitigate risks and take advantage of the opportunities that present themselves.

Indeed, investors’ portfolios should be diversified enough to see any market outcomes as an opportunity. A well-diversified portfolio should always include several industrial sectors and asset classes, as well as geographical regions.

As a new political landscape now unfolds, President Trump will now begin focusing on his own re-election and continue to seek policies to further boost the U.S. economy.

I think this next phase will start at the G-20 meeting with China.

Nigel Green is founder and CEO of deVere Group. One of the world’s largest independent financial advisory organizations, de Vere does business in 100 countries and has more than $12 billion under advisement.