The army of Northern Virginia wins a strategic victory at the battle of Gettysburg, not enough to win the war or a negotiated peace but enough to raise confederate morale. Following the battle Lee moves his forces south, not wanting to risk destruction of the confederate army and to much critisism from southern politicans and generals.
In early 1864 President Lincoln made Ulysses S. Grant commander of all the Union armies. Grant tried to implement a strategy of total war, however this proved unpopular with americans so much so that troops were booed as they paraded in the independence day parade of 1864. At this moment of national indecision the confederates recieved a final piece of luck. Whilst riding home from the White House his Soldier's Home retreat on the evening of August 15th Abraham Lincoln was shot. Despite doctors best efforts he died later that evening (it is still unclear who shot him and why).
Lincoln had already been nominated by the Republican-War Democrat alliance that had been called the National Union Party for another term as president, although there was much doubt as to whether he could have won the election. Vice President Hannibal Hamlin assumed the Presidency, although it was clear he would not serve a full term (he had been dropped as Lincoln's running mate in favour of War Democrat Andrew Johnson of Tennessee. With less than 4 months before the election and only one month after the National Union convention, the party was left without a clear presidential nominee, and without Lincoln, any sense of leadership. The party splintered into various factional nominations with Ulysses S. Grant, Hannibal Hamlin, Salmon P. Chase and William H. Seward all being hailed as nominees. Andrew Johnson became the parties offical nominee, with Hannibal Hamlin as his running mate (without his consent).
With the National Unionists in disarray it was little surprise that the Democrat's won the November 1864 election, with Horatio Seymour becoming the 18th President of the United States. Seymour, with Secretary of State Clement Vallandigham negotiated a truce with the confederates in April 1865, and in July the Treaty of London was signed, making peace official.