Election seasons often spark questions about what might come next for the economy and the markets. As the 2026 midterms draw closer, some investors are wondering whether they should make changes to their portfolios or simply stay the course. It’s a fair question. Midterm elections can influence fiscal policy, tax legislation, government spending and the broader regulatory environment. But when it comes to investing, it’s important to separate what’s truly worth paying attention to from what’s simply generating headlines.
What Investors Are Watching
A few themes stand out this cycle. The balance of power in the House and Senate is a big one because it will influence how much legislation can move forward over the next two years. Trade policy, energy production, domestic manufacturing and supply chain resilience continue to be areas of focus, with potential implications across multiple sectors of the economy.
Investors are also paying attention to broader economic and global developments. Ongoing geopolitical tensions, the rapid buildout of A.I.-related infrastructure, government spending, retirement policy and affordability concerns are all likely to shape economic discussions long after ballots are counted.
A Little History for Perspective
Every election cycle feels unique and has its own dynamics, but political change is nothing new. In fact, midterm elections often reshape priorities in Washington. History shows that the party holding the White House has generally lost seats in Congress during midterm elections since World War II. (See footnote 1)
That’s not a forecast for 2026; rather, it’s a useful piece of perspective when thinking about what may lie ahead. Markets have also tended to respond reasonably well to periods of divided government.
In many cases, legislative gridlock limits large policy swings and creates a more predictable environment for businesses and investors. A unified government can lead to more substantial policy changes, which may create both opportunities and uncertainty.
Either way, the election could play a role in shaping economic policy and growth expectations for the remainder of the presidential term. That said, markets generally react more to factors like inflation, interest rates, corporate earnings and global events than to election results alone. Politics matter, but it’s rarely the primary driver of long-term investment outcomes.
Volatility Is Part of the Process
Midterm election years often bring a little more market volatility than non-election years, and this cycle may be no different. The good news is that markets have historically performed well in the year following an election as uncertainty fades and investors gain a clearer sense of the path ahead. (See footnote 1)
Staying Anchored
No one knows exactly how the midterms will unfold or how markets will respond in the weeks and months that follow. What we do know is that uncertainty is a normal part of investing. That’s why periods like these can be a good reminder to step back and look at the bigger picture.
If your investment strategy is aligned with your goals and built with flexibility in mind, it may not need to change every time the political landscape does.
Footnote 1: Ameriprise Investment Research Group, August 2026: “2026 midterms — what a new Congress could mean for investors”
Christopher Thompson, CFP ®, CMFA ®, CRPC ® is a Private Wealth Advisor and Managing Director with Upper Deck Wealth Management a private wealth advisory practice of Ameriprise Financial Services, LLC. in Ponte Vedra Beach, FL. He specializes in fee-based financial planning and asset management strategies and has been in practice for 33 years. To contact him, www.ameripriseadvisors.com. 904-380-2322, chris.thompson@ampf.com, 818 A1A Hwy N, Suite 301, Ponte Vedra Beach, FL 32082.
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