If the markets could vote in the midterms...

THE INVESTMENT IMPLICATIONS OF THE 2026 MIDTERMS may emerge less in the broad market than in individual sectors and stocks. As Election Day approaches, investors are watching how control of Congress could shape budget negotiations, healthcare funding and financial regulation — and how governors’ races could affect the buildout of AI data centers.

In the video above, Chris Hyzy, Chief Investment Officer for Merrill and Bank of America Private Bank, speaks with Annie Palisi, senior vice president of Federal Government Relations for Bank of America, and Dan Clifton, head of Policy Research at Baird Strategas, about what the midterms could mean for investors. They discuss how different election outcomes could change the scope for policy negotiations, why major tax legislation may be difficult under divided government, and what might be done regarding voter concerns over AI and data centers. “There’s a lot of conversation about how to address it and what’s the right thing to do,” says Palisi.

Palisi and Clifton also examine potential opportunities and headwinds across sectors such as healthcare, industrials, defense and financials, emphasizing that effects could differ within individual sectors. They also consider why historical midterm market patterns may not tell the whole story this year. As Clifton puts it: “Midterm elections are never really macro elections. They're about sectors and specific stocks.”

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Important information

The opinions expressed are as of 10/15/2026 and are subject to change. Investing involves risk, including the possible loss of principal.

Past performance is no guarantee of future results.

Dan Clifton and Baird Strategas are not associated with Bank of America.

Asset allocation, diversification and rebalancing do not ensure a profit or protect against loss in declining markets.

Investments have varying degrees of risk. Some of the risks involved with equity securities include the possibility that the value of the stocks may fluctuate in response to events specific to the companies or markets, as well as economic, political or social events in the U.S. or abroad. Investments in a certain industry or sector may pose additional risk due to lack of diversification and sector concentration.

This information should not be construed as investment advice and is subject to change. It is provided for informational purposes only and is not intended to be either a specific offer by Bank of America, Merrill or any affiliate to sell or provide, or a specific invitation for a consumer to apply for, any particular retail financial product or service that may be available.

 
The Chief Investment Office (CIO) provides thought leadership on wealth management, investment strategy and global markets; portfolio management solutions; due diligence; and solutions oversight and data analytics. CIO viewpoints are developed for Bank of America Private Bank, a division of Bank of America, N.A., (“Bank of America”) and Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S” or “Merrill”), a registered broker-dealer, registered investment adviser and a wholly owned subsidiary of Bank of America Corporation (“BofA Corp.”).