Voter concerns leading up to the election are wide-ranging. RBC Capital Markets equity analysts seem mostly unfazed by the election scenarios. We assess the state of House and Senate control and recommend investors focus on what matters more.
September 9, 2026
Kelly Bogdanova Vice President, Portfolio AnalystPortfolio Advisory Group – U.S.
Less than two months away from the midterm election on Nov. 3, multiple polls and other indicators point toward the Democrats winning control of the House of Representatives.
Republicans currently hold a slim 218–214 majority; one Independent caucuses with Republicans and two seats are vacant. Despite all 435 seats being up for grabs and the lowest number of incumbents running for reelection since records have been kept in 1930, only 42 seats are in contention (defined as “toss up,” or “lean Democratic” or “lean Republican”), according to poll aggregator 270toWin.
To retain House control, Republicans would need to defy history. Since 1906, the president’s party has added House seats in only three of the past 30 midterm elections, and those additions were skimpy, ranging from only five to nine seats.
The track record for the president’s party was worse when presidential approval was below 50 percent. President Donald Trump’s job rating currently stands at 39.6 percent, according to the RealClear Polling (RCP) average of 11 polls.
Importantly, Democrats have a 5.8 percentage point advantage in the “generic ballot” poll, RCP’s aggregated data indicates.
The RealClear Polling averages shown here represent an aggregate of 15 independent poll results. Because the results of individual polls are independent of one another, scores for Democrats and Republicans may not add up to 100%.
Source – RealClear Polling (RCP) averages; polling data gathered from July 22 through Sept. 2, 2026
The bar chart shows generic ballot poll results for the 2026 U.S. midterm elections by political party preference. 48.1% of respondents would vote for a Democrat and 42.3% would vote for a Republican.
There are caveats to what seem like Democrats’ advantages, however. Republican campaign structures lead their Democratic counterparts in funding and Elon Musk, the world’s wealthiest man and first trillionaire, financially backs the Grand Old Party (GOP).
In addition, pollsters could be underestimating Republicans’ recent election cycle “get out the vote” successes and the president’s ability to mobilize supporters. The impact of gerrymandering (redrawing districts to suit political objectives) and GOP efforts to change voting rules in certain states is also difficult to gauge.
While the Senate power balance seems close at this stage, control of the upper chamber could conceivably flip to the Democrats as well—an unlikely prospect earlier this year.
Republicans hold a 53 to 47 seat majority, and they need 50 seats to maintain power given the vice president’s constitutional role as the tie breaker. In other words, Democrats need to flip four Senate seats to gain control.
Among the 35 of 100 Senate seats up for election in November (including two that will be decided by special elections), 11 are considered “safe” Republican seats, nine are labelled “safe” Democratic seats, and 15 seats are in play (either toss up or likely/leaning toward one party or the other), according to 270toWin. The six toss-up states are currently Texas, Maine, Ohio, Iowa, Alaska and Michigan.
The most famous words in modern American politics, “the economy, stupid,” coined 34 years ago, still apply today. That phrase was marked on a whiteboard by James Carville, then-Governor Bill Clinton’s aggressive and colourful presidential campaign manager, to keep the campaign focused on what mattered the most to voters.
Today, inflation is the most important overall issue and economic issue, according to The Economist’s tracking poll based on YouGov data.
Blame for the high cost of living is mainly falling on the party in power and President Trump specifically.
The Consumer Price Index (CPI) year-over-year inflation rate has risen to 3.4 percent from 2.9 percent on Inauguration Day in Jan. 2025, despite campaign promises to reduce inflation.
Cost-of-living angst has been renewed by the spring 2026 inflation resurgence sparked by the U.S./Israeli military attacks on Iran, near halt to Strait of Hormuz shipping, subsequent constraints on Red Sea oil shipments and the related energy price spikes.
Even if inflation comes down to the Federal Reserve’s target rate of two percent next year, we think Americans’ attitudes about the cost of living will remain sour for quite some time.
Cumulative consumer prices are about 28 percent higher today, on average, than they were in early 2020, just before the COVID-19 crisis began. The population needs more time to absorb and adjust to this large price spike, in our view.
In previous inflation waves in the mid-1970s and early 1980s (granted, bigger inflation episodes), unease and fears about inflation lasted much longer than was rational in hindsight, into the mid-1990s. All the while inflation rates declined dramatically during that period.
We think the cost of living will once again be among the top voter issues during the 2028 presidential election regardless of whether consumer inflation data comes back down to the Fed’s target by then. Most voters care more about the prices they see at the grocery store than what the government reports as year-over-year inflation data.
Issues ranked by the “All voters” category, which includes Republicans, Democrats and others. Three additional issues registered smaller proportions than national security: abortion, education and civil liberties.
Source – The Economist, “Tracking the presidency,” which tracks YouGov polling, as of 9/1/26
The bar chart shows the top eight issues of concern for American adults as of September 1, 2026 according to YouGov polling, with each issue shown in three groups: All voters, Republicans, and Democrats; the results are ranked in order by the “All voters” category. The issue of greatest concern is inflation: 29% for all voters, 32% for Republicans, and 30% for Democrats. For other issues, the responses for each of the three categories are listed in the same order. The second issue of concern is jobs and the economy: 14%, 13%, 14%. Health care is third: 10%, 6%, 13%. Immigration is fourth: 8%, 16%, 2%. Taxes and government spending is fifth: 7%, 9%, 3%. Climate change and environment is sixth: 6%, 1%, 9%. Civil rights is seventh: 5%, 1%, 10%. National security is eighth: 5%, 9%, 1%.
An issue that does not show up as being among the most important in polling data may end up impacting some statewide and local races, and possibly even a small number of House and Senate races: the buildout of AI data centres. Over the past year, opposition has mounted.
From an investment perspective, AI and the related infrastructure buildout have been extremely positive stories since AI technology took off in late 2022.
However, the permitting and construction of AI data centres is increasingly being opposed in local communities and even on a statewide level, in some cases. Public opinion polls indicate that Americans overwhelmingly oppose having data centres built in their communities or nearby mainly due to concerns about higher electricity and water prices and potential noise implications. The anti-AI data centre attitude prevails regardless of political affiliation, gender, income, age, etc. It’s what Americans call a NIMBY issue: Not In My Backyard!
Source – Quinnipiac University poll of American adults; data published in March 2026
The bar chart shows how American adults responded to a poll question on whether they would support an AI data centre being built in their communities. Responses are divided into three categories: support, oppose, or don’t know/not applicable. The data is shown by political party affiliation (Republican, Democrat, and Independent) and gender. Republicans have the highest support for data centres at 34%, and 32% of men would support construction of a data centre. Support among Democrats, Independents, and women is lower. The level of opposition to AI data centres is high for all categories, with Democrat opposition the highest at 78% compared to Republican opposition at 56% and Independents at 66%. More women (72%) than men (58%) oppose data centres.
Many Americans, like others around the world, are also concerned that AI will displace jobs. This too is reflected by all age groups, and when the data are sliced and diced into other categories such as political affiliation, race, income bracket and gender, according to Quinnipiac polling.
Despite voter anxiety about AI and economic issues, and the increasing likelihood that party control could shift partially or fully in the next Congress, RBC Capital Markets, LLC’s equity analysts don’t foresee much impact on their industries under coverage, according to a study by the firm’s Head of U.S. Equity Strategy Research Lori Calvasina.
When all sectors are combined, the analysts forecast a modestly positive performance bias if Republicans retain control of both chambers, a neutral impact if Democrats win the House and Republicans maintain the Senate majority, and a modestly negative performance bias if Democrats win control of both chambers.
The RBC equity analyst survey points to a modestly positive performance bias for stocks in a Republican control scenario (due to views of friendlier regulation), a neutral view in a Democratic House / Republican Senate scenario and a modestly negative performance bias for stocks in a Democratic control scenario.
A higher number is generally more constructive, a lower number generally more negative. Scale is +2.00 (very bullish) to -2.00 (very bearish).
Source – RBC U.S. Equity Strategy, RBC Capital Markets based on a survey of industry analysts; results published on 8/11/26
The bar chart shows RBC Capital Markets equity industry analysts’ combined assessment of how three different scenarios of Congressional control after the 2026 midterm election could impact the U.S. equity market on a scale of +2.00 (very bullish) to -2.00 (very bearish). This reflects a combination of all sector assessments. In the full Republican control scenario, the assessment is +0.56%. In the divided control scenario where the Democrats control the House and Republicans control the Senate, the assessment is +0.02. In the full Democratic control scenario, the assessment is -0.35.
But there are nuances associated with the latter scenario. While the overall assessment is slightly negative for Democrats winning the House and Senate, viewpoints vary by sector.
For example, there is a positive assessment for the Consumer Staples sector, a very bearish assessment for the Utilities sector, and variation in between with most sectors scoring slightly negatively, as the chart below shows.
Source – RBC U.S. Equity Strategy, RBC Capital Markets; based on industry analyst survey results published 8/11/26
The bar chart shows RBC Capital Markets equity industry analysts assessments’ of S&P 500 sector implications if the Democrats win control of the U.S. House of Representatives and Senate. The scale is +2.00 (very bullish) to -2.00 (very bearish). The figure for “all industries” is -0.35. Figures are provided for each of the 11 S&P 500 sectors. The two that stand out the most are Consumer Staples at +1.00 (the largest positive sector impact) and Utilities at -2.00 (the largest negative impact). Consumer Discretionary is 0.00. All other sector impacts are moderately negative, ranging from -0.17 for Health Care to -0.67 for Financials. Communications Services and Real Estate impacts are assessed at -0.50.
Perhaps this explains one reason the Utilities sector has sold off 7.4 percent since late July, at the same time the S&P 500 has risen 4.1 percent—significant underperformance in such a short timeframe. The “NIMBY” attitude about AI data centres could be contributing to concerns about increased Utilities sector regulations should Democrats win both chambers. Also, we think the sector has traded lower because bond yields have jumped; the latter is considered a competing investment.
The sector details associated with all three midterm election scenarios are shown in the table below with red representing Republicans retaining control, purple indicating divided control and blue representing Democrats winning the House and Senate.
Note that for this survey’s scale, the very bullish reading is +2.0 and the very bearish reading is -2.0. The overwhelming proportion of the designations are not close to those extremes, and this is relevant from a portfolio-positioning perspective. We don’t think individual investors with a long-term time horizon should make major sector changes in anticipation of or because of the election outcome.
Typically, midterm election years bring volatility with them. It’s common for the S&P 500 to pull back notably at some point in the year preceding the election, and if it doesn’t, a pullback can happen right after the election.
The S&P 500 has experienced an average 21 percent correction surrounding midterm election years since 1934, as we pointed out in this report.
Given the market already endured a brief nine percent pullback last spring, this begs the question: has the usual midterm election-year performance hiccup been satisfied? Maybe, but we can’t exclude the possibility that another pullback could occur, especially if the Strait of Hormuz remains largely closed, Treasury yields continue to rise due to inflation risks and/or outright angst materializes surrounding the midterm elections.
In the 2018 midterm election year, during Trump 1.0 when Republicans lost the House to the Democrats, a sharp selloff occurred right after the election—which was rare. In the 2022 midterm year, the low point for the market occurred in mid-October, just ahead of the election. Republicans narrowly took back House control, although the number of seats gained was far less than pollsters expected.
Regardless of whether the midterm mindset seeps further into the U.S. stock market and volatility rises in the near term, we firmly believe other issues matter more to the market’s medium- and long-term performance than elections:
For additional thoughts about historical equity market performance surrounding midterm elections, and what this might be—or might not be—suggesting for this year and next, see our article titled, “Midterms, the market and what matters.”
Source – RBC Wealth Management, RBC Rochdale, Bloomberg; weekly price data from 1/1/28 through 8/28/26 shown in logarithmic scale.
This is a line chart of the S&P 500 weekly data from 1928 to August 28, 2026 shown on a logarithmic scale. The chart highlights significant historical events, starting with Black Tuesday (1929), the Great Depression (1929 to 1939), Second World War (1939 to 1945), the Suez Canal Crisis (1956), the Cuban Missile Crisis (1962), President Kennedy’s assassination (1963), the Vietnam War (1964 to 1973), the Arab oil embargo (1973), President Nixon’s resignation (1974), and the oil crisis and Middle East instability (1979 to 1980) when inflation peaked at 14.8%. In the era since 2000, the following events are shown: the bursting of the Tech Bubble (2000 to 2002), the Global Financial Crisis (2008), the COVID-19 pandemic (2020), and the introduction of ultra-high U.S. tariffs (2025). Overall, the market has continued to advance despite short-term negative impacts associated with these events.
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