{"id":12160,"date":"2026-11-04T14:33:02","date_gmt":"2026-11-04T19:33:02","guid":{"rendered":"https:\/\/www.guardiancapital.com/investmentsolutions\/?post_type=insight&p=12160"},"modified":"2026-11-04T14:34:46","modified_gmt":"2026-11-04T19:34:46","slug":"viewpoint-us-midterms-2026","status":"publish","type":"insight","link":"https:\/\/www.guardiancapital.com/investmentsolutions\/insights\/viewpoint-us-midterms-2026\/","title":{"rendered":"Viewpoint: About Last Night – The “Blue Wave” Makes Landfall in U.S. Midterms"},"content":{"rendered":"

About Last Night – The “Blue Wave” Makes Landfall in U.S. Midterms<\/strong><\/h2>\n

With the majority of votes for the U.S. midterm elections now in hand, it is apparent that the \u201cblue wave\u201d suggested by polls in fact materialized \u2014 and the outcome actually appears to have generally exceeded model expectations.<\/p>\n

Media outlets have called both the House and the Senate for the Democrats in a pretty significant shift among the electorate. As it currently stands, the Democrats have taken at least 236 seats in the House (projections are putting them around 257 seats once the votes are finalized; they had held 214 and 218 are needed for a majority) and at least 54 seats in the Senate (they had control of 47 and they could end up with as many as 56; 51 are needed for the majority) \u2014 and the latter includes flipping seats in former long-time Republican strongholds in South Carolina, Kansas and Texas.<\/p>\n

The Democrats did very well in the governors’ races (including historic wins in Texas and Georgia) and generally down-ballot too. A wave indeed.<\/p>\n

If the midterms are a referendum on the President, this is a pretty stunning rebuke. That said, I would suggest that people would be well served tempering that sort of viewpoint in their election post-mortems: I have argued before<\/a>1<\/sup>, a lot of this outcome is likely about high gas prices above anything else (though this is very much a situation where this was not a purely exogenous shock for the White House); the higher costs of living have factored into incumbents of all leanings getting ousted in elections globally of late.<\/p>\n

Equity markets came under pressure as the outcome became clear overnight against the assumption that a Democrat-held Congress likely means more regulatory scrutiny for things such as artificial intelligence weighing on the Information Technology sector (and slowing the push toward deregulation elsewhere), and the potential for reduced spending as Trump\u2019s agenda items face pushback (those $5,000 cheques are unlikely to be sent), which could mean a smaller fiscal impulse for growth.<\/p>\n

That course has broadly reversed as markets have opened today, however, as investors appear to be viewing the potential political gridlock and possibility of Congress restraining the Administration\u2019s less market-friendly impulses in a more positive light \u2014 and that politics will not likely knock the solid underlying economic momentum off course. Congress\u2019 ability to act as a counterbalance to the White House\u2019s less popular policies could be a recurring market theme over the coming two years.<\/p>\n

Note that it is not uncommon for markets to react adversely to political changeovers in either direction, but that markets have ultimately been higher one-year following the midterms each and every time in the post- WWII era (as I flagged in my \u201cmidterm study notes<\/a>2<\/sup>\u201d).<\/p>\n

Treasuries are getting bid as well on the prospect of more government pushback on added spending being a positive for fiscal sustainability — the movement in crude prices and inflation break-evens suggests some of the movhttp:\/\/viewpoint-midterm-study-notes-september-2026\/e may also reflect hopes that there will now be a quick resolution in the Middle East that relieves inflationary pressures.<\/p>\n

From a Canadian and international perspective, the change in Congress may well open the door for a less combative political relationship and some easing on the tariff front \u2014 though, that, like much else on the policy front, is to be determined.<\/p>\n

There is still a two-month period before Congress switches over (the so-called \u201clame duck\u201d session; the 120th Congress will not convene until January 3, 2027), meaning that Republicans can take the opportunity to force through agenda items \u2014 but after that, the road for the President to get legislation passed will be far more complicated.<\/p>\n

_____________
\nDavid Onyett-Jeffries<\/strong>
\nDavid Onyett-Jeffries is Vice President, Economics & Multi Asset Solutions, at Guardian Capital LP (GCLP). He provides macroeconomic guidance to GCLP and its affiliates. Additionally, he is a portfolio manager of GCLP’s multi-asset portfolios and funds and works closely with GCLP’s Directed Outcomes team.<\/em><\/p>\n

1<\/sup>\u00a0Guardian Capital LP, Viewpoint: Midterm Study Notes \u2013 October 2026, October 20, 2026, https:\/\/www.guardiancapital.com\/investmentsolutions\/insights\/viewpoint-midterm-study-notes-october-2026\/<\/a>
\n2<\/sup> Guardian Capital LP, Viewpoint: Midterm Study Notes \u2013 September 2026, October 20, 2026, https:\/\/www.guardiancapital.com\/investmentsolutions\/insights\/viewpoint-midterm-study-notes-september-2026\/<\/a><\/p>\n

This commentary is for general informational purposes only and does not constitute investment, financial, legal, accounting, tax advice or a recommendation to buy, sell or hold a security. It shall under no circumstances be considered an offer or solicitation to deal in any product or security mentioned herein. It is only intended for the audience to whom it has been distributed and may not be reproduced or redistributed without the consent of Guardian Capital LP. This information is not intended for distribution into any jurisdiction where such distribution is restricted by law or regulation.<\/strong><\/p>\n

The opinions expressed are as of the date of publication and are subject to change without notice. Assumptions, opinions and estimates are provided for illustrative purposes only and are subject to significant limitations. Reliance upon this information is at the sole discretion of the reader. This document includes information concerning financial markets that were developed at a particular point in time. This information is subject to change at any time, without notice, and without update. This commentary may also include forward-looking statements concerning anticipated results, circumstances, and expectations regarding future events. Forward-looking statements require assumptions to be made and are, therefore, subject to inherent risks and uncertainties. There is significant risk that predictions and other forward-looking statements will not prove to be accurate. Investing involves risk. Equity markets are volatile and will increase and decrease in response to economic, political, regulatory and other developments. Investments in foreign securities involve certain risks that differ from the risks of investing in domestic securities. Adverse political, economic, social or other conditions in a foreign country may make the stocks of that country difficult or impossible to sell. It is more difficult to obtain reliable information about some foreign securities. The costs of investing in some foreign markets may be higher than investing in domestic markets. Investments in foreign securities are also subject to currency fluctuations. The risks and potential rewards are usually greater for small companies and companies located in emerging markets. Bond markets and fixed-income securities are sensitive to interest rate movements. Inflation, credit and default risks are all associated with fixed-income securities. Diversification may not protect against market risk and loss of principal may result. Index returns are for information purposes only and do not represent actual strategy or fund performance. Index performance returns do not reflect the impact of management fees, transaction costs or expenses. Certain information contained in this document has been obtained from external parties, which we believe to be reliable; however, we cannot guarantee its accuracy.<\/p>\n

Guardian Capital LP is the manager and portfolio manager of the Guardian Capital Funds and Guardian Capital ETFs, with capabilities that span a range of asset classes, geographic regions and specialty mandates. Additionally, Guardian Capital LP manages portfolios for institutional clients such as defined benefit and defined contribution pension plans, insurance companies, foundations, endowments and investment funds. Guardian Capital LP is an indirect wholly owned subsidiary of Desjardins Global Asset Management Inc., which is part of the Desjardins Group. For further information on Guardian Capital LP, visit www.guardiancapital.com<\/a>.<\/p>\n

Published: November 4, 2026<\/p>\n","protected":false},"excerpt":{"rendered":"

With the majority of votes for the U.S. midterm elections now in hand, it is apparent that the \u201cblue wave\u201d suggested by polls in fact materialized \u2014 and the outcome actually appears to have generally exceeded model expectations.<\/p>\n","protected":false},"comment_status":"closed","ping_status":"closed","template":"","insight_tags":[155],"class_list":["post-12160","insight","type-insight","status-publish","hentry","insight_category-insights","insight_tags-market-insights"],"acf":[],"lang":"en","translations":{"en":12160},"pll_sync_post":[],"_links":{"self":[{"href":"https:\/\/www.guardiancapital.com/investmentsolutions\/wp-json\/wp\/v2\/insight\/12160","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.guardiancapital.com/investmentsolutions\/wp-json\/wp\/v2\/insight"}],"about":[{"href":"https:\/\/www.guardiancapital.com/investmentsolutions\/wp-json\/wp\/v2\/types\/insight"}],"replies":[{"embeddable":true,"href":"https:\/\/www.guardiancapital.com/investmentsolutions\/wp-json\/wp\/v2\/comments?post=12160"}],"wp:attachment":[{"href":"https:\/\/www.guardiancapital.com/investmentsolutions\/wp-json\/wp\/v2\/media?parent=12160"}],"wp:term":[{"taxonomy":"insight_tags","embeddable":true,"href":"https:\/\/www.guardiancapital.com/investmentsolutions\/wp-json\/wp\/v2\/insight_tags?post=12160"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}