2026 Midterms: Best Stocks to Buy Now & 6 Sectors to Know

By Sean Brodrick Reviewed by: Jim Nelson

2026 midterm election results continue to roll in this morning here in the U.S.

While several key local races have yet to be called, Democrats appear set to take control of both the House and the Senate. 

Stock futures dipped on the news last night. But the major U.S. indices opened higher.

Wall Street’s reactions fit what history shows … 

A divided government has rarely been a problem for the economy.

After all, a divided government can force negotiations over federal budgets and spending priorities. In other words, the market is betting that deficits and debt will grow more slowly.

You can see this view reflected in rising gold prices this morning. Gold is also climbing because the U.S. dollar is weaker — which is the bigger story for your savings.

Gridlock can slow the spending, but it won’t fix the debt. That’s why we’re asking you to add your name to the Declaration of Dollar Independence. Learn more here.

We could see more wild swings in the market before the election results are fully digested. 

I think the smart thing to do now is to get cash together and make your shopping lists of what you want to buy before … 

The Midterm Boom!

Since 1950, the S&P 500 racked up gains after the midterms from November through April. That’s 19 times in a row!

Why? Once an election is over, investors can start pricing in the political reality rather than endlessly speculating about what MIGHT happen.

And circling back to political gridlock, that isn’t necessarily bad news for stocks. It can make major policy changes more difficult.

Trump’s Veto Threat

Before you wonder or worry too much about what Democrats plan to do in office …

(Though you can see what I believe are the top 15 items here) … 

Remember that — as long as President Trump is in the White House — the odds of the Dems passing any new laws are near zero. 

Why? Veto power!

Under Article I, Section 7 of the U.S. Constitution, the president possesses veto power over any bill passed by Congress. 

Overriding a presidential veto requires a two-thirds supermajority in both the House (290 votes) and the Senate (67 votes) — margins neither party has commanded in decades.

Even if the results point to a so-called “blue-nami,” Democrats likely would not come close to reaching those numbers in any standard majority scenario.

In fact, late last night, President Trump told CBS News: 

“I have total veto power and I'm sure we'll be able to work things out … I think they're gonna want to work with me. Otherwise, I'd just veto everything, and they're not gonna want that." 

However, America voted because it wanted to see change.

Here’s Where You Could See Changes Fairly Quickly

Four areas to watch …

Appropriations. Legally, the president cannot spend a single dollar that Congress does not appropriate. Trump might decide to spend money anyway.

The Supreme Court ruled in 2024 that President Trump has absolute immunity for “core” Constitutional powers, and presumptive immunity for other acts. So, if that happens, expect fireworks.

Tariffs. A Democratic Congress may try to seize back control over tariffs from Trump. 

A study from the Tax Foundation shows Trump’s tariffs cost consumers roughly $820–$1,000 on average per household.

Getting rid of Trump’s tariffs would help consumers and be a win for Democrats. 

President Trump would likely veto any bill to eliminate his tariffs. But there might be enough Republicans with an eye on 2028 to override his veto.

Investigations. Democrats can hold hearings with sworn witnesses and organize all sorts of investigations into corruption, including corporate corruption. They’ll be able to stage impeachment hearings again, and those could extend beyond the president. 

Judges & Appointees. Dems could also refuse to seat any new Trump judges or appointed officials. This won’t affect America’s finances, so I’ll leave that battle to others. 

So, that’s the big picture. As an investor, you should be thinking about “What should I be buying … and what should I be selling?”

I have three ideas for you to buy, and three to sell.

Three Groups to Buy

#1. Healthcare Providers & Medicaid/ACA Beneficiaries. Democrats hold a firm block against more Medicaid funding cuts and can protect hospital reimbursement rates. 

Companies including HCA Healthcare (HCA) and Tenet Healthcare (THC) benefit directly from insured patient volume and government reimbursement. 

You can also play this through the Healthcare SPDR (XLV).

#2. Green(er) Energy. Republicans slashed green energy tax credits that were in Biden’s Inflation Reduction Act. 

Since more than 70% of utility-scale clean energy, battery gigafactories and solar component plants are located in Republican-held congressional districts, Dems might find enough support to override a presidential veto if they move to reinstate those subsidies.

The iShares Global Clean Energy ETF (ICLN) and the Invesco Solar ETF (TAN) could get a boost if reinstating that funding becomes a Democratic priority. 

#3. Consumer Staples. Democrats will try to do something to help low-income families. 

In previous budget standoffs, Democrats routinely asked for protections for the Supplemental Nutrition Assistance Program (SNAP), expansions to the Child Tax Credit and support for working-class purchasing power.

Walmart (WMT) and Target (TGT) stand to benefit. You can also play this using the Consumer Staples SPDR (XLP).

3 Groups That Are at Risk

Nothing is certain, but it’s likely that those companies that benefited handsomely from President Trump will also face scrutiny and funding cuts. 

We have some time — the new Congress won’t be seated until next year, and it will take months for any investigations to get going.

Still, there are areas of concern …

#1. Private Prisons. Private prison operators, including CoreCivic (CXW) and The GEO Group (GEO), may face serious funding restrictions. They could also face probes into their cost-per-bed profits and lobbying relationships. 

Keep in mind that private prisons function under longer-term contracts, and long-term contracts won’t go away. 

But a Democratic Congress could slash or stop funding for detention facilities and beds used by Homeland Security. 

#2. Companies Connected to the Trump Sons. Don Jr. and Eric are on the boards of — or advisers to — at least five public companies and uncounted private firms. 

Several landed big, fat government contracts once the Trump boys got on board. It’s likely there will be investigations into those contract awards. 

If you own a company with a Trump on the board, you might have even bought it for that reason. I’m not saying you should rush to sell; I’m saying that you should be aware of what might be coming. 

#3. Meta Platforms & SpaceX. Meta (META) is fundamentally a sound and growing company. But the headlines don’t always focus on the financials.

The company faces allegations of child safety and exploitation; illicit drug sales on Facebook and Instagram; algorithms designed to be addictive; deceptive privacy practices; antitrust activities and more.

Don’t be surprised if Metaends up in Congress’ sights when Dems get the power to hold hearings. 

Meanwhile, there are allegations that Elon Musk throttled Starlink’s satellite internet service to limit Ukrainian military operations. That might weigh on Musk’s SpaceX (SPCX). 

Ready, Aim, Firearms

When President Obama was elected, gun sales surged. 

President Biden — same thing.

Even though the presidential election is two years away, don’t be surprised if guns and ammo sales enjoy an immediate uptick.

That’s good news for companies like Smith & Wesson Brands (SWBI). It’s one of America's oldest and best-known firearms manufacturers, producing pistols, revolvers and rifles. 

It sports a dividend yield near 4%, too! Shares gained some 2.5% in today’s pre-market trading. And at just around $13 a share, it’s an inexpensive way to protect yourself during the next few months.

Bottom line: Now that we know what to expect, the real work begins. Not just in Congress, but right here in our own portfolios.

The best news to come out of the 2026 midterms is this:

Investors can be the real winners of this election — history is on our side. And this shopping list is designed to help continue that tradition.

All the best,

Sean