As the 2026 U.S. midterm elections take place on November 3 local time, major U.S. news outlets expect Democrats to win a House majority. Depending on the final balance of power in the Senate, the rest of the Trump administration’s term and U.S. economic policy could take different paths.
The election has drawn considerable interest in U.S. politics, with more than 57 million people voting early and election spending projected to reach a record high of about $11.9 billion. The central question was whether voters’ assessment of President Trump’s second term so far would translate into a shift in congressional power.
In the 2024 presidential election, Trump swept the key battleground states, producing a result that differed from some polling averages. That has renewed interest in how closely historical patterns and pre-election forecasts will match the actual vote in this midterm election.
Midterms Have Favored the Opposition: The Background to Democrats’ Advantage
U.S. midterm elections are congressional elections held halfway through a president’s four-year term. Voters elect all 435 members of the House and some members of the Senate, determining the balance of power in Congress for the next two years.
The historical record shows a clear pattern unfavorable to the party in power: in 20 of the 23 midterm elections held from 1934 through 2022, the president’s party lost House seats. It gained seats only in 1934, 1998 and 2002.
This historical trend formed a key backdrop to the 2026 midterms. In their pre-election House seat projections, many research organizations also forecast that Democrats would win at least the 218 seats needed for a majority.
Polls immediately before the election also showed favorable signs for Democrats. In a nationwide AtlasIntel survey conducted from October 28 to November 1, 55.5% of respondents intended to vote for Democratic candidates, compared with 41.4% for Republican candidates—a lead of 14.1 percentage points.
But nationwide voting intentions by party do not necessarily match the distribution of seats across individual districts, so the actual outcome will not be known until the votes are counted.
The 2024 U.S. presidential election illustrates this point. In RealClearPolling’s final national polling average, Harris led Trump by 0.1 percentage points, 48.7% to 48.6%. But Trump swept all seven key battleground states in the election and secured 312 electoral votes.
The national popular-vote share and the number of electoral votes are different measures that cannot be directly compared. Still, the example shows that even a narrow gap in pre-election polls can translate into a large difference in the balance of power.
What Betting Markets and Political Funding Reveal About the Election
Separate from polling, prediction markets reflecting expectations about the election priced contracts for Democrats to win both the House and Senate at high levels. As of 12:25 a.m. on November 4, South Korea time, the figure was about 75% on Kalshi and 76.5% on Polymarket.
Because people are betting real money, prediction markets can be highly accurate. But there is a reason people say an election is not over until it is over.
Brazil’s presidential runoff last October illustrates that limitation. Although some prediction markets priced in a strong chance of victory for Flávio Bolsonaro, Lula da Silva won reelection with 51.79% of the vote.
Political donations also reveal the differing interests of U.S. industries. D&A Advisory’s analysis of FEC filings found differences in how donations associated with major Big Tech companies and emerging AI firms were distributed between the parties.
Republican-linked donations accounted for a larger share of those associated with Nvidia and SpaceX, while Democratic-linked donations were greater for Alphabet, Microsoft and Amazon. The analysis attributes these company-level differences to their respective policy interests, including semiconductor export restrictions, tariffs and AI infrastructure regulations.
Meanwhile, in federal political donations tracked by SignalData from January 1, 2025, to October 14, 2026, Elon Musk and related entities contributed the most, at $445.6 million. That far exceeded the roughly $150.2 million donated by Richard and Elizabeth Uihlein, who ranked second.
Political donations are a major source of funding for election advertising, candidate support and voter mobilization. But the size of a candidate’s fundraising haul does not necessarily guarantee an electoral advantage, so the distribution of funds and the actual results need to be examined separately.
The economy is the top issue. How will the makeup of Congress affect the stock market?
Apart from the political contest, the economy was the election issue U.S. voters considered most important. In a Pew Research Center survey conducted from September 28 to October 4, 84% of registered voters rated the economy as a “very important” issue in deciding their vote.
The economy ranked highly with supporters of both parties’ candidates: 88% of Democratic candidate supporters and 82% of Republican candidate supporters considered it important. But Democratic supporters placed relatively more importance on the future of democracy, health care and education, while Republican supporters placed more emphasis on immigration and violent crime.
The makeup of Congress after this election will also affect the prospects for advancing economic policy. If Democrats and Republicans each control one chamber, legislative gridlock could leave much of current policy in place. If one party wins both chambers, the negotiating landscape for budgets, taxes and regulation could change.
In an analysis published October 15, Russell Investments outlined three scenarios: Democratic control of both chambers, a divided Congress and Republican control of both chambers. It said fiscal policy, tariff authority and regulations governing AI data center construction could affect the economic environment in 2027.
An RBC Capital Markets assessment of the effects by sector also found differences. Under a scenario in which Democrats control both the House and Senate, consumer staples scored +1.0 points and utilities -2.0 points, while the aggregate score across all sectors was -0.35 points.
These scores are qualitative assessments on a scale from -2 to +2, not actual stock returns or percentage changes. Concerns about possible AI data center regulations were reflected in the negative assessment of utilities.
RBC also said an election alone cannot determine the stock market’s long-term direction. It emphasized that factors beyond the election—including corporate earnings, interest rates, economic growth and technological innovation—could continue to shape the U.S. stock market.
The central question in the 2026 U.S. midterm elections is not just whether control of Congress changes hands, but how the resulting balance of power will affect the Trump administration’s ability to advance its policies, checks on its power and the investment environment for businesses.
With Democrats expected to secure a House majority, the final outcome in the Senate and the way Congress operates afterward will help clarify which of the policy and financial-market scenarios outlined before the election actually materialize.
