Collection
Asset managers' research on the 3 November 2026 US midterm elections — scenarios, sector and asset-class implications, and market history.
72 pieces · page 3 of 3 · updated as new research is indexed
Natixis strategists argue AI hyperscaler spending is beginning to show monetization signs that justify heavy capex, but slowing capex growth, fiscal drag and weak consumption could push US growth toward a lower trend path. Garrett Melson adds the recent global bond selloff reflects repricing of central bank rate paths rather than fiscal or AI-issuance crowding-out, suggesting duration is becoming more attractive.
The authors argue that rising Treasury yields, Fed tightening, energy price swings, AI spending concerns and midterm elections are manageable risks, not threats to a bullish thesis built on an AI-driven infrastructure boom. They maintain a 2027 year-end S&P 500 target of 10,000 and advise buying market weakness.
Aberdeen Investments' Paul Diggle and Lizzy Galbraith forecast Democrats will narrowly win the Senate and House in the November 3 US midterms, driven by voter discontent over high energy prices and Trump approval. They argue divided government would limit legislation but could produce modest fiscal loosening as defense and healthcare spending asks are traded off.
BlackRock argues U.S. midterm election outcomes will shape fiscal risk, bond yields and sector winners, with divided government likely regardless of result, persistent deficits near 6% of GDP, and reshoring remaining a durable theme.
Allianz Global Investors outlines three US midterm scenarios—divided Congress, Democratic sweep, or Republican sweep—arguing fiscal consolidation is unlikely regardless of outcome, leaving rates and the dollar most exposed to political volatility.
J.P. Morgan Asset Management's Zara Nokes argues divided government is the likeliest outcome of the 2026 US midterms, leading to policy gridlock, greater executive-order reliance, and limited fiscal change that investors should largely look through.
J.P. Morgan's Jordan Jackson notes the S&P 500 has risen every year following midterm elections since 1950, averaging 15% gains, and argues current fundamentals support continued strength. He cites strong earnings growth, resilient GDP, robust capex, a less hawkish Fed and depressed sentiment as reasons to stay invested rather than trade around the election.
Natixis Investment Managers Solutions' Jack Janasiewicz highlights that since 1974, S&P 500 median performance has typically bottomed roughly three weeks before U.S. midterm elections before rallying into year-end and beyond.
Schroders' George Brown argues divided government after US midterms won't curb fiscal deficits, potentially weakening the dollar initially while pushing Treasury yields higher via rising term premia. He warns policy uncertainty, not directional trades, poses the greatest risk to Treasuries, the dollar and equity sector leadership.
Vanda argues historical midterm election patterns show pre-vote volatility followed by strong post-election equity returns, but contends 2026's outcome—likely a divided Congress—will matter less for markets than AI-driven earnings, Fed policy and geopolitical risks. It advises against repositioning portfolios around election headlines.
Fisher Investments argues that 2026's midterm elections will likely follow historical precedent, with President Trump's party losing congressional seats and increasing legislative gridlock. This gridlock reduces legislative risk and should extend the historic 'Midterm Miracle' stock rally through mid-2027.
Schroders' George Brown argues US midterms will likely produce a Democratic House and possibly Senate, intensifying fiscal fights and sector scrutiny without reversing Trump's policy direction. He warns gridlock may not mean fiscal restraint, risking a steeper Treasury curve and greater equity sector dispersion rather than aggregate market shifts.
New York Life Investment Management argues the 2026 US midterms matter less for which party controls Congress than for what they reveal about persistent fiscal-driven rate pressure, AI infrastructure pushback, and geopolitical fragmentation. These structural forces are expected to keep shaping markets and diversification strategies through 2027 regardless of the election outcome.
RBC GAM's MacroMemo argues rising oil prices and hot inflation data are pushing the Federal Reserve toward a rate hike, while diverging US-China bond yields reflect distinct economic problems rather than relative strength. It also examines AI data-centre backlash, midterm-election market seasonality, and the structural roots of Canada's stagnant productivity.
T. Rowe Price's Gil Fortgang and Tim Murray argue the 2026 U.S. midterms will shape AI regulation debates and 2028 election dynamics, with divided government likely supporting the dollar and Treasuries but weighing on precious metals.
State Street Global Advisors' Elliot Hentov and Arjun Kapur argue the 2026 US midterms will likely produce divided government with limited legislative change, but incrementally affect tech, utilities, financials and health care sectors. They see rising AI policy scrutiny and political volatility building toward more consequential shifts in the 2028 election cycle.
American Century Investments examines how the 2026 U.S. midterm elections could affect municipal bonds, arguing state and local races—covering property taxes, wealth taxes and data-center policy—matter more to munis than federal contests. The firm says active managers attuned to these election-driven fiscal and credit issues are best placed to find opportunities.
Historical data show midterm elections have limited impact on broad U.S. equity returns, with economic growth, corporate earnings, and financial conditions serving as more important drivers than political outcomes.
With midterms unlikely to produce sweeping legislation, the piece argues investors should target sector-specific policy themes—AI, financials, defense, energy—rather than a broad partisan market playbook. It also cautions that gridlock won't reset the underlying macro regime of tariffs, deficits and fiscal-driven volatility.
Wellington argues that US midterm election outcomes matter less for investors than durable, bipartisan structural shifts toward national security-driven resilience, including US-China competition, AI infrastructure, and industrial policy. These trends will persist regardless of which party controls Congress.
Polls point to divided US government after the 2026 midterms, likely raising near-term equity volatility, but history shows the S&P 500 has posted strong post-election gains regardless of outcome. Investors are urged to focus on fundamentals rather than election headlines.
J.P. Morgan strategists argue U.S. midterm election outcomes matter less for markets than underlying economic fundamentals, with history showing equities rise post-midterms regardless of unified or divided government. They expect a likely divided Congress to preserve policy continuity on AI infrastructure, tariffs and foreign policy, while fiscal expansion risk rises mainly under a Democratic sweep.
Historical data since 1950 shows U.S. stocks have gained an average 24.5% in the 12 months following midterm elections, regardless of which party controls Congress. Investors are advised against adjusting portfolios based on election forecasts, focusing instead on long-term financial goals.
Federated Hermes examines how the 2026 US midterm elections could reshape Congress and affect markets, noting Democrats may regain the House while Republicans could retain the Senate. It argues a divided government historically supports stronger S&P 500 returns, whereas a Democratic sweep with a Republican president has been the weakest configuration for stocks.
