3 Stocks With Midterm Election Momentum (and 2 Facing Uncertainty)
With the 2026 midterms looming in November, investors are viewing Washington as yet another variable to weigh. Typically in the U.S., midterm election years result in weak stock-market returns (along with heightened volatility), with the following year being something of an economic bounce-back for the markets. The 2026 midterm, however, is shaping up to be an altogether different beast, as the market has been unusually unflappable for a midterm election cycle.
That said, the midterms are still a variable, one that could send some stocks surging and others plummeting — defense contractors and financial firms are getting a lot of policy exposure, while healthcare and some defense names face specific risks.
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Knowing how to best predict their market performance can do wonders for your portfolio. Below are three stocks that look to finish strong in 2026, and two that appear a bit shakier.
Consider Buying: Lockheed Martin
Defense spending has definitely become one of the most obvious policy-sensitive market drivers heading into November. According to MarketBeat, the proposed fiscal 2026 Defense Department budget allocates more than a whopping $13 billion to profitable AI initiatives. Lockheed is currently working to add those initiatives into existing platforms, with funding from established government contracts.
Further, Barron’s reported that analysts at Swiss investment bank UBS upgraded Lockheed to “Buy” status and raised their price target to $674, citing growth in its missile business.
Consider Avoiding: L3Harris Technologies
L3Harris is an example of why defense spending alone doesn’t guarantee market success. Per Barron’s, independent investment research firm Melius Research downgraded L3Harris to “Hold,” citing increased competition and a paused missile-business spinoff.
Elsewhere, MarketWatch noted that L3Harris remained more than 35% below its 52-week market high in September. Big defense spending may support the broader industry at large, but these company-specific problems should give any investor pause.
Consider Buying: RTX
According to MarketBeat, the defense company RTX has partnered with Shield AI for radical new tech research and development, while The Wall Street Journal noted that the corporation is expanding missile production as the U.S. replenishes its depleted inventories.
Consider Avoiding: Humana
Healthcare is always a politically fraught topic, especially in an election year. Hence, health insurance/managed healthcare company Humana is already facing a number of pressures. According to Reuters, insurers are reducing their Medicare Advantage as costs rise, with Humana cutting its plan offerings for about 942,000 members in 2027. The Centers for Medicare & Medicaid Services (CMS) expects average Medicare Advantage premiums to fall more than 16% next year.
Those aren’t the only problems Humana is facing. Per Morgan Stanley, insurers and pharmaceutical companies are facing greater scrutiny over reimbursement and public programs, which isn’t likely to send the company’s stocks skyrocketing.
Consider Buying: JPMorgan Chase
Financial services like JPMorgan Chase could benefit from a divided government, and most midterm election predictions say that is what’s coming: a Republican president with a Democratic Congress. That type of political split increases the potential for greater regulatory clarity and a more accommodating environment for mergers and acquisitions — the exact kind of environment in which companies like JPMorgan thrive.
Editor’s note: Investing involves risk, including the possible loss of principal. Always consider your individual circumstances and consult with a qualified financial advisor before making investment decisions.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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