These Stocks Could Be the Biggest Winners of the 2026 Midterms

Summary

The midterm elections in the United States are still six months away, but there are many stocks that are getting a boost. Elections have consequences for policy initiatives, and that’s particularly true for midterm elections. S&P Dow Jones research shows that for mid- and small-cap companies, cross-sector effects in congressional election months were greater than average 83% of the time in months with only congressional elections, outpacing presidential election months at 67%. This suggests midterms may actually be more disruptive to sector relationships than presidential elections, even if they receive less attention. The reason is obvious and becoming amplified as the extremes of both parties hold greater sway. Specific to this November, if the party out of power wins control of both houses of Congress, investors should expect a very different set of policy priorities. Conversely, if the status quo remains, there will be more of what’s been in place in the last two years.Get Lockheed Martin alerts:Sign Up Politics Matters Less Than the Macro StoryBut that’s not necessarily what the markets are showing. That’s a good reminder that the stock market is not the economy, but that economic fundamentals shape the market more than election outcomes do. With the midterm elections looming, issues like inflation, GDP growth, and geopolitical tensions may carry more weight for investors. This is why it’s always important to remember that markets are forward-looking. Short-term momentum plays a role for sure. But in many cases, when investors see a stock or an entire sector moving higher or lower, they should take out their crystal ball, because that’s what the big money is doing. Before stepping away for summer activities, it may be time to consider taking, or adding to, a position in these securities. LMT and RTX Don't Have to Be an Either/Or DecisionEven if the kinetic part of the conflict with Iran is over, the first half of 2026 has illustrated the likelihood that more wi...