Why Tech Stocks Are Bracing for the Midterm Elections

House Minority Leader Hakeem Jeffries and House Minority Whip Katherine Clark on the steps of the U.S. Capitol. (Kevin Dietsch/Getty Images)

There’s just over a month to go until the midterm elections —and those could have an impact on highflying artificial-intelligence stocks, as well as several other sectors.

That’s according to Citi, which laid out its forecast for the looming election in a research note late Tuesday. The bank said it “would not be surprised” if the Democratic Party wins the House and the Senate.

The midterms are likely to be a “non-event for S&P 500 fundamentals” no matter the outcome but a Democrat sweep could impact several sectors, according to Citi’s U.S. equity strategist Scott Chronert.

Insurance, healthcare equipment, and pharma stocks could do relatively well in that scenario due to the expectation that the Democrats will restore some lost healthcare coverage, he said.

Chip investors “prefer GOP control, likely tied to AI legislation risk,” Chronert added, while noting that President Donald Trump would still be able to veto any attempts to regulate AI by lawmakers.

Some Democratic politicians have proposed more AI oversight in the run-up to the midterms. Trump has rejected calls to slow down development of the technology, citing the need for the U.S. to move at a faster pace than China.

Inflation, the economy, and the Iran war are among the other issues voters are weighing up.

The odds suggest that the Republicans will struggle to retain either the House or the Senate. Users of the online-prediction site Polymarket were pricing in a 66% chance of a Democrat sweep as of Wednesday.

(Polymarket has a data-sharing partnership with Dow Jones, the publisher of Barron’s.)

Write to George Glover at george.glover@dowjones.com

Copyright ©2026 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8