Americans vote in the midterm elections on 3 November. Control of Congress decides how easily the next two years of tariffs, spending and regulation get through. Some kinds of company depend on those decisions far more than others.
What is on the ballot for markets
Trade has been the loudest issue this autumn. The administration has promised farmers $8 billion in aid, a report put Georgia’s tariff bill at $22.1 billion, and Democrats have said they would end the tariffs without yet setting out how, according to one report. Energy is close behind: the administration waived some Russia-related tariffs weeks after signing a sanctions bill, as oil prices rose ahead of the vote.
The sectors most tied to Washington
| Sector | What Washington decides | Which way it can cut |
|---|---|---|
| Defence | Budgets, export approvals and procurement | Spending bills can lift or delay orders |
| Farming and food | Tariffs, retaliation and farm aid | Aid helps farmers, tariffs raise their costs |
| Energy | Drilling permits, sanctions and tariffs | Policy can change both supply and price |
| Manufacturing | Tariff protection and industrial subsidies | Protection helps some and raises input costs for others |
| Cybersecurity | Federal contracts and security rules | New rules tend to mean new spending |
How policy-linked portfolios have done
| Portfolio | 1 month | 3 months | 1 year | S&P 500, 1 year |
|---|---|---|---|---|
| Defence-AI Convergence Index12 companies | −1.9% | +20.2% | −20.9% | +14.4% |
| Drone Warfare Index10 companies | −4.0% | +8.2% | −24.6% | +14.4% |
| Hypersonics & Missile Defense Index10 companies | −0.7% | −3.9% | −15.8% | +14.4% |
| AgTech & Precision Farming Index10 companies | −7.6% | −1.7% | +21.2% | +14.4% |
| US & Middle East Energy Index10 companies | +11.4% | +21.4% | +62.3% | +14.4% |
| American Reshoring & Industrial Renaissance Index15 companies | −0.4% | −3.0% | +22.1% | +14.4% |
| US & Israel Cybersecurity Index12 companies | −2.6% | +18.4% | +64.7% | +14.4% |
Prices up to 22 October 2026. Returns before each portfolio was made are simulated from real past prices, with no fees or taxes. Past performance is not a guide to the future.
As of 20 October the three defence portfolios were all down over twelve months, while energy, cybersecurity and reshoring were all ahead of the S&P 500 over the same period. Being in the headlines and making money for shareholders are not the same thing.
What elections usually do to returns
Over long periods, which party won has mattered less to US share prices than profits and interest rates. Elections tend to change which sectors lead more than the direction of the market. That is a reason to know your sector exposure before the result, not a reason to trade on a guess about the result.
Arithmos is a research tool. We do not predict election results, and nothing here is advice.