Election outcomes could reshape stock market by shifting business leverage

Summarised from CNBC's report · Updated 2 Nov, 12:46 · Archive

The midterm election could reshape which industries gain leverage in Washington through changes to federal spending and regulatory oversight. Companies such as Lockheed Martin, which derives about 70 per cent of its sales from the U.S. government, and Coinbase, which awaits congressional rules on cryptocurrency, could see their fortunes shift based on which party controls Congress.

Democratic control of either or both chambers would grant the party committee gavels and subpoena power, allowing them to investigate companies, demand documents, and compel testimony. However, President Donald Trump would retain his veto power and broad authority over tariffs, immigration and federal regulation. Historically, stocks have performed well under divided government, with the S&P 500 gaining an average of 23 per cent in the year after midterms when Congress was split under Republican presidents, compared with 16 per cent when Democrats controlled both chambers, according to Morgan Stanley analysis. Some analysts caution against assuming that pattern will repeat.

Read the report

• Midterm elections could jolt stocks if Democrats sweep CongressWall Street weighs how the 2026 midterms could affect stocks, Treasury yields, artificial intelligence, energy prices, banks, defense and healthcare.CNBC · 3 Nov, 11:54
• Defense, healthcare, crypto and AI: How the midterm election could affect stocksDemocratic gains in Congress could bring tougher oversight of major companies and shift billions of dollars in federal spending and regulatory policy.CNBC · 2 Nov, 11:00

In this story: Lockheed Martin · Molina Healthcare · Coinbase · Donald Trump · Morgan Stanley · Congress

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