The Midterm Elections Playbook

Research evidence excerpt

The Midterm Elections Playbook

Equity Research

8 July 2026

U.S. Equity Strategy

Midterm election headwind for equities tends to peak in late

summer. Post-midterms, equity demand improves and Tech

typically dominates; the sector likes lower policy uncertainty U.S. Equity Strategy

given its global footprint, especially re: trade and national Venu+1 212Krishna,526 7328CFA

venu.krishna@barclays.comsecurity. Our base case election outcome is divided gov't.

BCI, US

Key Points & Highlights Rex Feng

+ 1 212 526 6114

• Midterm election year underperformance tends to peak in late summer. Weaker S&P 500 rex.feng@barclays.com

returns in a midterm election year are a well-documented phenomenon, but the effect is not BCI, US

spread evenly across the run-up to election day. The lag vs. non-midterm years is most

Riddhiman Dass

material in August & September, likely as election-related uncertainty and risk premiums +1 212 526 0850

reach their maximum. Our derivatives strategists offer several near-term hedging ideas riddhiman.dass@barclays.com

post-2Q re-risking and amid selectively extended positioning. BCI, US

• Following the election, risk-on sentiment tends to pick up materially, leading to better- Tianqi Feng

+1 212 526 9179 than-average S&P 500 returns over the subsequent year. Tech, Growth and Quality are the

tianqi.feng@barclays.com

most consistent leaders over this time frame, outperforming in all but one of the last nine BCI, US

midterm cycles. We remain Positive on Tech as valuations have come in YTD and expanding AI

capex should create EPS headroom for component names. We prefer Growth to Value despite Atharva Weling

+1 212 526 3204 higher rate risk, favoring Growth's EPS upside as revisions breadth is still relatively narrow.

atharva.weling@barclays.com