On November 3, 2026, Americans are called to the polls for the midterm elections, better known as the Midterms. This election is particularly important for Donald Trump, since he could lose his majority in Congress and see part of his economic policy called into question.
But beyond political stakes, these elections could also have consequences for stock markets. Certain sectors, such as defense, health care, or renewable energy, are particularly sensitive to decisions made in Washington. And for investors, the results could just as well create opportunities as generate new risks.
Discover in this article everything you need to know about the 2026 Midterms, their potential impact on the stock market and the U.S. stocks to watch depending on the election results (Republican victory, Democratic victory, or divided Congress).
U.S. Elections: why can the Midterms move the stock market?
Midterm elections are not held to elect a new president, but to renew the 435 seats in the House of Representatives and about one third of the Senate. Their importance is nonetheless considerable, as it is Congress that votes, among other things, tax laws and public spending. Depending on the election results, Donald Trump could thus have more or less freedom to implement his economic program during the last two years of his term.
For financial markets, three scenarios are to be considered:
- A Republican victory in both chambers would facilitate the continuation of Donald Trump’s economic policy.
- A divided Congress would obligate the two parties to negotiate more, especially on budgets and public expenditures.
- A Democratic victory in both chambers could slow some presidential reforms and strengthen parliamentary oversight of businesses.
But beware, a favorable electoral result for a sector does not guarantee a rise in its stock. Investors must also take into account stock valuations, company profits, and the expectations already priced into the markets.
The elements presented below are provided for informational and educational purposes only. They do not constitute investment advice or a recommendation to buy or sell securities. Finally, please note that past performance does not predict future results and that all stock market investments carry a risk of capital loss.
Defense: 3 U.S. stocks to watch after the 2026 Midterms
In the United States, the major defense groups primarily serve the Pentagon. Their order books depend largely on military budgets approved by Congress. And the stakes are substantial because the Trump administration has proposed a national defense budget close to $1.5 trillion for 2027, a project of exceptional scale, whose funding still depends on Congressional decisions.
The Midterms results could thus change the game for defense sector companies:
- If the Republicans maintain their majority, Donald Trump would have more latitude to get his military spending plans adopted, a prospect of interest for arms manufacturers, notably those who produce combat aircraft, missiles, or defense systems.
- If the Democrats take control of one or both houses, budget discussions could become more complicated. Some military programs could be reviewed, delayed or subjected to longer negotiations.
This does not necessarily mean that a Democratic victory would be bad news for all defense stocks. The United States will continue to invest heavily in its military, whatever the Congress majority. It remains to be seen how this money will be allocated among different military programs, and above all which groups will benefit.
Lockheed Martin stock (LMT)
Lockheed Martin (LMT), renowned for its F-35 fighter jets, could be one of the major beneficiaries of an increase in the U.S. military budget after the 2026 Midterms. The company is also a major player in missile production and missile defense systems.
In the third quarter of 2026, Lockheed Martin reported a record order backlog of $292 billion, up 27% from the prior quarter. A rise fueled in particular by a large multi-year contract on PAC-3 missiles.
Why monitor Lockheed Martin stock?
An increase in military spending could accelerate production of its equipment. But the group remains highly dependent on Pentagon decisions, notably for the funding of the F-35 program, some contracts of which are still under negotiation.
RTX Corporation (RTX)
RTX Corporation (RTX) is among the U.S. companies that could benefit from higher military spending after the 2026 Midterms. The group manufactures Patriot and Tomahawk missiles, but also has significant civil aviation activities.
In the third quarter of 2026, its order backlog reached $340 billion, of which $164 billion was in defense. A substantial figure, as these contracts already provide visibility into its future revenue.
Why monitor RTX stock?
An increase in military budgets could support its orders, while its civilian activities allow it to be less dependent on Congress. However, this diversification does not fully protect RTX stock from market downturns or from evaluations that are too high.
Northrop Grumman stock (NOC)
The stealth bomber B-21 Raider and the future Sentinel nuclear missile are among the major American military programs in which Northrop Grumman (NOC) participates. Projects worth billions of dollars and whose funding spans several years. It goes without saying that Congressional budget decisions are far from secondary for the group.
And at the moment, orders are not in short supply since Northrop Grumman landed $16.4 billion in new contracts in the third quarter of 2026, while its revenue for the same period was $11.1 billion. Its order backlog thus reached a record level of nearly $110 billion, which represents about two and a half years of revenue at the current pace.
Why monitor Northrop Grumman stock?
The group could benefit from budgetary support for modernization programs. However, cost overruns, especially on the B-21 and Sentinel, should be watched. For Northrop Grumman shareholders, the challenge will be not only to secure new contracts but also to preserve margins on these particularly complex programs.
Health: 3 stocks to watch depending on the outcome of the U.S. elections
Healthcare is one of the most sensitive topics in these elections. The cost of medical insurance, the price of drugs, and hospital funding are at the heart of the debates. And for publicly traded companies, decisions made in Washington can have direct consequences on their revenue and profitability.
Two scenarios to watch after the Midterms for health sector stocks:
- If the Democrats win the majority in Congress, they could seek to strengthen health insurance subsidies and to limit budgetary restrictions on the Medicaid program, aimed at the least affluent Americans. A development that could benefit hospitals and some health insurers. Conversely, pharmaceutical labs could face greater pressure on drug prices.
- If the Republicans maintain their majority, Donald Trump would have more latitude to pursue his policy of reducing federal health spending. Hospitals serving many Medicaid-covered patients could in particular suffer.
For investors, it will therefore be necessary to evaluate companies case by case. An insurer, a pharmaceutical lab, and a hospital group will not necessarily react in the same way to election results.
UnitedHealth Group stock (UNH)
UnitedHealth Group (UNH) made a fairly radical choice to fix its accounts: to accept losing some insured customers rather than keeping contracts that had become too costly. And this strategy is starting to pay off. In the third quarter 2026, the group posted $112.7 billion in revenue, a slight decline, but its operating profit jumped from $4.3 billion to $6.6 billion year over year.
That said, not everything is resolved. UnitedHealth remains highly exposed to Washington decisions, notably through Medicare Advantage, its insurance activity primarily for seniors. After the Midterms, investors will thus be watching the next decisions on public reimbursements. Because even if the group manages to better control its medical costs, an unfavorable evolution of pricing could quickly complicate its recovery.
Why monitor UnitedHealth stock?
The rebound in profits is an encouraging first signal, but it remains to be seen whether this improvement can continue without further harming UnitedHealth’s revenue growth. For investors, the next challenge will be to see whether UnitedHealth can regain profitable growth, rather than simply cutting its least profitable activities.
Eli Lilly stock (LLY)
Selling its drugs at lower prices while achieving record sales is the strategy Eli Lilly (LLY) seems to be succeeding with. Driven by the success of Mounjaro and Zepbound, its diabetes and obesity treatments, the American pharmaceutical group saw its revenue rise 39% in the third quarter of 2026, to $24.4 billion.
What is interesting is that this growth comes despite a 15% drop in average selling prices. Volumes, however, rose by 53%. For Eli Lilly, the question of drug reimbursements in the United States takes on particular importance as the Midterms approach. Wider access to treatments could enable the company to sell more, but price negotiations could also weigh on its profitability.
Why monitor Eli Lilly stock?
The commercial success of Mounjaro and Zepbound is not, by itself, enough to determine whether the stock is worth buying. Investors must also look at the price they pay for this growth. If future earnings are already largely anticipated in Eli Lilly’s stock price, even very good results may not be enough to push the stock higher.
HCA Healthcare stock (HCA)
Having more patients is not necessarily good news for a hospital group. HCA Healthcare (HCA) is currently experiencing this in the United States, where a portion of Americans has lost health coverage. As a result, admissions of uninsured patients in its facilities rose by 27.2% in the third quarter 2026.
And that is starting to cost a lot. According to HCA Healthcare, the increase in the share of uninsured patients weighed on its pre-tax results by about $400 million in Q3 2026. A substantial sum for a single quarter, even as patient traffic in its facilities grows. After the Midterms, decisions on health insurance subsidies could therefore have significant consequences for the group’s next results.
Why monitor HCA Healthcare stock?
The maintenance or restoration of certain health insurance subsidies could reduce the number of unreimbursed care. Conversely, new Medicaid restrictions could heighten pressure on hospital margins.
Renewables: 3 stocks that could benefit from the 2026 Midterms
For American renewable energy companies, Donald Trump’s return to the White House marked a real shift in direction, notably because the president openly favors oil and gas, while several tax provisions that supported solar and wind development have been rolled back. Some companies must now deal with less profitable projects and more difficult-to-finance investments. The Midterms could therefore have particular importance for this sector.
Two possible developments for the renewables sector depending on the outcome of the U.S. elections:
- A Democratic majority in Congress could limit new restrictions and attempt to preserve the tax credits still in place, a rather favorable perspective for solar and wind companies, even if the president would retain his veto power.
- If the Republicans maintain their majority, there are few reasons to expect a change in energy policy. Fossil fuels would remain a priority and renewable energy companies would continue to operate in a less favorable regulatory environment.
But political decisions are not everything. With the rise of artificial intelligence and the proliferation of data centers, electricity demand is rising sharply in the United States. This demand could offer new opportunities for renewable energy producers, regardless of the election outcome.
Enphase Energy stock (ENPH)
It is hard to talk about Enphase Energy (ENPH) without mentioning the challenges facing the U.S. residential solar market. The company, which also makes microinverters and batteries for photovoltaic installations, saw its sales fall 29% in the third quarter 2026, to $293.3 million. And the outlook remains challenging, as management expects another decline in its activity in the fourth quarter.
The elimination of the federal tax credit for individuals has strongly affected the sector, already hit by high interest rates. A change in Congress majority could improve political prospects, but would not be enough to restart sales overnight.
Why monitor Enphase Energy stock?
Enphase Energy’s stock could rebound if investors anticipate a return of solar subsidies. But before positioning for a durable recovery, it would be prudent to wait for concrete signs of demand improvement, particularly in the U.S. market.
NextEra Energy stock (NEE)
The development of renewables is only part of NextEra Energy’s business. In Florida, the group also supplies electricity to several million customers through its subsidiary Florida Power & Light. A major difference from solar panel manufacturers, as this activity provides more regular revenue.
The latest figures show that investments continue. In Q3 2026, NextEra Energy Resources, the group’s subsidiary focused on developing energy projects, added 3.7 gigawatts of new renewable and storage projects to its backlog, which now totals 36.7 gigawatts.
Why monitor NextEra Energy stock?
The Midterms could influence subsidies for new projects, but NextEra Energy has another growth driver: American electricity consumption. For investors, it will also be important to monitor the cost of financing its investments and the terms of its merger with Dominion Energy.
First Solar stock (FSLR)
First Solar (FSLR) holds a fairly unique position in the U.S. solar industry. Unlike many competitors, the manufacturer produces its panels using thin-film technology and has substantial manufacturing capacity in the United States. This positioning could allow it to benefit from American protectionist measures, even under an administration less favorable to renewables.
In Q3 2026, its revenue fell 23% to $1.23 billion, despite an increase in net income. Its backlog stood at 44 gigawatts.
Why monitor First Solar stock?
First Solar could benefit from both support for American production and potentially more favorable solar policy. But tariff uncertainties are already delaying some orders, which calls for caution on its growth prospects.
How to invest in U.S. stocks during the Midterms?
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Should you buy American stocks as soon as the Midterm results are known? Not necessarily. It will depend on the companies involved, but also on Wall Street’s reaction. If the new Congress signals more favorable prospects for defense, health care, or renewables, some investors might take the opportunity to buy the stocks highlighted in this article, or even add to their positions. Others will prefer to sell, take profits, or cut losses if the election results undermine their initial scenario. To trade in the U.S. markets, stock brokers like XTB, Trade Republic, Freedom24 or Interactive Brokers allow buying and selling U.S.-listed stocks.
But suppose you already own Eli Lilly or Lockheed Martin shares for several years. You might not want to sell them because of an election, even if you fear a short-term market correction. There is another option: hedge your portfolio with options, for example by buying put options. Saxo Bank or IG offer derivative instruments that can be used for this strategy. This helps limit certain losses if stock prices fall, without having to part with your shares. Of course, such protection is not free, and a poorly calibrated hedge can also prove ineffective.
For traders, the situation is even different. Some will seek to profit from the market’s initial reactions, without necessarily holding their positions for long. With ProRealTime or eToro, traders can use derivatives to anticipate a rise or fall in U.S. stocks and major indices like the S&P 500 or Nasdaq. Other instruments, such as turbos, warrants, or certificates, also allow taking positions on the markets, depending on the products offered by each brokerage. Be careful with leverage: a wrong forecast can cost a lot, and some of these products can lead to the loss of the entire invested capital.
During an election night, stock prices can move sharply, sometimes in both directions, and losses can be as swift as the gains hoped for.
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Past performance does not guarantee future results. Investing in stocks carries a risk of capital loss.
All our information is, by nature, generic. It does not take into account your personal situation and does not constitute personalized recommendations for carrying out transactions and cannot be considered as financial investment advice, nor as any encouragement to buy or sell financial instruments. The reader is solely responsible for using the information provided, and no recourse against the publisher Cafedelabourse.com is possible. The publisher’s liability cannot be engaged in case of error, omission, or ill-timed investment.
