4 Market Signals Ahead of the Midterms

Morgan Stanley expects the 2026 midterms to shift fiscal mechanics and AI data-center rules, not the core executive policy agenda.

• Executive agenda holds firm: Tariffs, trade policy, deregulation, immigration, and export controls stay under White House authority regardless of which party controls Congress after 2026.
• Fiscal policy is the real swing factor: Congress mainly affects timing of scheduled SNAP/Medicaid cuts, defense spending, and government funding/debt limit negotiations.

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