The 2026 Midterms: Results, History and Three Takeaways

Market Insights    ·  November 2026

The 2026 Midterms: Results, History and Three Takeaways

Kevin Spires, CFA®, CFP®, FRM  ·  Bellaire Capital Management, LLC  ·  November 5, 2026

Important: this is an opinion piece. The views below are my own opinions about the 2026 midterm elections, the Federal Reserve, and the 2028 presidential race. They are as of the date of publication, and they are not statements of fact, forecasts or guarantees. Opinions, predictions and probabilities, including those from prediction markets and futures pricing, can be wrong and can change quickly. This article is for general informational purposes only. It is not investment, tax, legal or political advice, and it is not a recommendation to buy, sell or hold any security or to take any action. It does not endorse or oppose any political party, candidate or policy. Election results, polling and market data come from third-party sources named in the text, and Bellaire Capital Management, LLC does not guarantee their accuracy or completeness. Investing involves risk, including the possible loss of principal. Please speak with your advisor before making any changes to your portfolio or financial plan.

The 2026 midterm elections are over, and the results will shape the political and economic conversation for the next two years. Here are the results, some historical context, and three takeaways.

The results

Democrats swept the House and the Senate, and they turned Texas blue for the first time in decades.

As of Thursday morning, November 5, 2026, and according to the Associated Press, the House stands at 240 Democrats to 147 Republicans, with 48 races left to decide. As of the same morning, the Senate stands at 54 to 44, counting the two independents who caucus with the Democrats, with two races, Alaska and Mississippi, left to decide. Democrats flipped seven Republican-held Senate seats: Iowa, Kansas, Maine, North Carolina, Ohio, South Carolina and Texas. In the governors’ races, as of the evening of Wednesday, November 4, 2026, and according to MultiState, Democrats hold 29 governorships to the Republicans’ 20, with one race, Kansas, left to decide.

In Texas, James Talarico defeated Ken Paxton for the U.S. Senate, the first Democratic Senate win in Texas since 1988, and Gina Hinojosa defeated Greg Abbott for governor, the first Democratic governor in more than 30 years.

Historical context

Midterms are historically hard on the president’s party. According to Al Jazeera , in 18 of the 20 midterms from 1946 to 2022, voters took House seats away from the party in control of the White House, and the average loss was 26 seats. Only Bill Clinton’s Democrats in 1998 and George W. Bush’s Republicans in 2002 bucked the trend. The president’s party lost Senate seats in 13 of those 20 midterms but lost control of the chamber in only six. Recent swings have been large: Democrats lost 64 House seats in 2010, and Republicans lost 42 seats and control of the House in 2018.

1. AI and Elon Musk are on notice

The AI buildout now faces pressure from two directions. Voters across the country backed data center moratoriums and slowdowns, and Democrats now control Congress and are expected to assert more control over AI models and their capacity to do harm.

Elon Musk, who spent roughly $474 million this cycle, is an apostate to the party he once supported. He says he stayed the same while the Democratic party lurched to the left, but he has been very politically active over the last two election cycles, and this time his side lost. Democrats have made him a villain, and Senator Chris Coons has said he will subpoena him. Representative James Walkinshaw says he “must answer for it under oath.” Commentator Scott Galloway went further, saying, “Elon Musk is a traitor to the West. We lined up the Rosenbergs against a wall.”

The politics are also local to Musk: Texas turned blue just as SpaceX is reportedly exploring Texas sites for large data centers, and Talarico campaigned on the line “He is trying to buy Texas.”

For investors, AI spending and the companies tied to it now carry political risk that was not priced in a year ago, at a time when the two biggest private AI companies, Anthropic and OpenAI, are exploring going public with IPOs.

2. The Federal Reserve has the political room to raise rates

Voters punished the party in power over affordability, and inflation is the problem the Fed still has to solve. In my opinion, with the election behind it and Democrats now in control of Congress, the Fed has the political room to raise interest rates if inflation requires it.

The market does not expect much of it. As of the morning of November 5 and according to the CME Group’s FedWatch tool , the federal funds target range is 3.75% to 4.00%, and futures pricing shows a 76.2% probability of a quarter-point increase at the December 9 meeting. Looking out to the December 2027 meeting, the most likely outcome is a range of 4.25% to 4.50%, or two increases, at 34.8%, and there is a better than 65% probability that two increases is the maximum.

3. The race for the 2028 presidential election has officially begun

With the midterms decided, every move in Washington for the next two years will be read through the 2028 lens, and the field is already forming. As of November 5 and according to the prediction market Kalshi , the top contenders for the Democratic nomination are Jon Ossoff at 20%, Alexandria Ocasio-Cortez at 10% and Gavin Newsom at 8.5%. On the Republican side they are J.D. Vance at 14%, Marco Rubio at 12% and Ron DeSantis at 6.1%.

Vance and DeSantis have already blamed the Iran war for the Republicans’ midterm losses, positioning themselves as “not Trump” on that issue. Vance wrote on X , “The reason we lost is the war. ... But everyone knows why we lost. And any honest conversation about where we go from here must start there.” DeSantis, according to Cleveland.com , said voters were more concerned about the cost of living and the Iran war. Rubio, as the administration’s main point person internationally, has a harder time distancing himself. Democrats feel emboldened.

It is going to be a long two years. There are topics that should be discussed but probably won’t.

Social Security and Medicare are now likely to exhaust their trust funds around the next president’s term, and both will have to be restructured. The 2026 Trustees reports project that the Social Security retirement trust fund (OASI) will be depleted in the fourth quarter of 2032, after which incoming revenue would cover about 78% of scheduled benefits. The Medicare Hospital Insurance trust fund is projected to be depleted in the second quarter of 2033, with about 89% of scheduled benefits payable. The next president’s term runs from January 2029 to January 2033.

Government spending is also not aligned with government revenue, and a debt crisis for U.S. Treasuries is a possibility.

If you would like to talk about how any of this fits into your own plan, please reach out to BCM.

Kevin Spires, CFA®, CFP®, FRM

Principal and Chief Investment Officer, Bellaire Capital Management, LLC

6300 W Loop South, Suite 395, Bellaire, TX 77401  ·  713-542-4972  ·  info@bellairecapital.com  ·  bellairecapital.com