Midterm election campaigns don't carry the weight of a presidential election, but ignoring them would be a mistake for investors.

Democrats are heavily favored to take control of at least the House of Representatives in this November's midterms. Prediction market Kalshi gives them an 86% chance of winning the House. The Senate math is harder for the Democratic Party, which would need to pick up at least four seats to win majority control. Kalshi gives the Democrats a 48% chance of taking the Senate.

The fate of President Donald Trump's agenda over the next two years rests in large part on which party controls Congress. The midterm campaign season could also provide important clues to the outlook for artificial-intelligence regulation, the national debt, and other issues affecting investors.

Here are five things that Barron's will be watching in the lead-up to the Nov. 3 elections.

Trump becomes a lame-duck president

For the Trump administration, the outcome of the midterms is essentially binary: Either the Republican Party retains control of both houses of Congress, allowing the president to further his legislative agenda, or it doesn't. Democratic control of either or both houses would spell the end of any legislative plans Trump had for his final two years in office.

The race most likely to tip Senate control is in Ohio, where former Sen. Sherrod Brown is attempting to make a comeback two years after losing his seat to Bernie Moreno (R., Ohio). Ohio is more right-leaning than many states where Democrats are attempting to pick up seats, and Brown's victory would probably portend victories for Democrats in Maine, Michigan, North Carolina, and the other states where Democrats could tip the balance of power.

Democrats still couldn't pass bills on their own, but they probably would use control of the House and Senate to open myriad investigations into the Trump administration and the private companies seen as its allies. Targets could include AI companies like OpenAI, crypto firms like Trump's World Liberty Financial, and big banks.

Trump could try to retain the spotlight with aggressive executive actions or foreign-policy moves, said Stephen Myrow, managing partner at Beacon Policy Advisors.

"The more the midterms blow up in his face, the more he will want to show he's still in control," Myrow added.

Crypto's political power is put to the test

The digital-assets industry has notched some big wins during the Trump era, but the biggest hoped-for victory-a comprehensive bill to regulate crypto-remains elusive. Crypto firms are likely to spend tens of millions of dollars on campaign ads to try to get the bill over the finish line.

Fairshake, a crypto-funded super PAC, said in August that it and its network of political action committees have $122 million on hand to spend in the November elections. That's an enormous amount of money by campaign standards, enough to make Fairshake larger than almost any other PAC this fall.

"We're focused on building durable power that lasts for election cycles to come. Our success so far in 2026 demonstrates the effectiveness of that strategy," said Fairshake spokesperson Geoff Vetter in a statement.

The war chest hasn't been enough to persuade Democrats to back the so-called Clarity Act, which would put most crypto trading outside the purview of securities laws. The bill goes to a vote on Sept. 15, and most analysts expect Democrats to block it. Fairshake and crypto executives have made clear that opposition to the industry could result in Fairshake supporting lawmakers' opponents, as happened during the 2024 elections.

Trump's ardent support of crypto is leading many Democrats to write off the industry as partisan. Trump held a White House event in August with crypto executives that attempted to rally support for the bill but also attacked Democrats as obstructionists.

"The crypto industry risks severely overindexing to one side of the aisle and branding itself as an arm of the Republican Party," said Milan Dalal, a lobbyist with Tiger Hill Partners and former staff member for Sen. Mark Warner (D., Va.). "If Democrats retake control in the midterms and beyond, this all-or-nothing political strategy could backfire."

AI becomes a bipartisan punching bag

Crypto won't be the only big spender in this election cycle. Earlier this year, the artificial-intelligence PAC Leading the Future said that it and its network of political action committees had raised $140 million to spend in the midterms. The group recently gave last-minute support to Sen. Darline Graham (R., S.C.) in her bid to win her party primary, citing her support for the industry.

But if the midterm cycle is showing anything so far, it is that AI-and especially data centers-are rapidly losing supporters in Washington and with local governments. New York Gov. Kathy Hochul (D.) was the first to impose a statewide moratorium on data-center construction, but since then she has been joined in slowing construction by erstwhile AI supporters such as Pennsylvania Gov. Josh Shapiro (D.) and Texas Gov. Greg Abbott (R.).

Crypto industry money was effective in 2024 in part because voters didn't have a strong opinion about digital assets. In contrast, voters in both parties have shown deep distrust of AI and railed against the construction of data centers near them. An August Economist/YouGov poll found that only 24% of Americans said data-center construction is good for the country, compared with 47% who said it was bad.

Trump has said that data-center construction is essential to winning the AI race, and the industry has several key supporters in and near the administration, such as venture capitalist and White House adviser David Sacks, who will probably keep the White House in their camp. But if AI continues to be a punching bag this campaign season, that could lead to more regulation of the industry once Trump leaves office.

No one wants to address the national debt

Investors are newly concerned about ballooning deficits and rising yields on Treasury bonds. Treasury Secretary Scott Bessent recently said the U.S. will buy back billions of dollars of long-dated government bonds, and asserted that he has a "big toolkit" to bring down long-term yields that he said are mispriced. In the next Congress, however, advocates for reducing the debt may be few and far between.

A case in point is the fate of the so-called Freedom Caucus, a group of Republican lawmakers who have made lowering the debt a priority. The caucus fought the size of Trump's tax and spending bill in 2025, and has periodically threatened to derail other legislative efforts over their cost. Still, Trump has nearly always been able to bring caucus members into line to support his priorities.

The caucus has taken severe blows so far during this campaign season. Catalina Lauf, whom the Freedom Caucus supported, lost her primary in Florida to replace Rep. Byron Donalds (R., Fla.), who is running for governor. Rep. Andy Ogles (R., Tenn.), Rep. Chip Roy (R., Texas), and Rep. Ralph Norman (R., S.C.) also lost their bids for re-election or election to other offices. Although the Freedom Caucus doesn't publish an official member list, seven of the 31 lawmakers who were known to be a part of it won't be in the House next year.

"Despite what both parties like to think and claim, both Republicans and Democrats have a spending and tax problem," wrote Libby Cantrill, head of public policy at Pimco, in a recent note.

That could change in a few years, when the depletion of Social Security's trust fund could necessitate mandatory benefit cuts, Cantrill wrote. "In some ways, this type of 'grand bargain' feels inevitable, but Congress is only likely to act when it has to," she said.

Left-wing Democrats eye the White House in 2028

On the other hand, a party faction on the rise is the left wing of the Democratic Party. Candidates backed by the Democratic Socialists of America won primary races in New York and Colorado and are expected to easily win in the general election. Abdul El-Sayed won the Democratic nomination in the Michigan primary over his more moderate opponent, but is expected to face a tougher race for a Senate seat in the general election.

The candidates' success or failure in the general election could be seen as a preview of 2028, when left-wing Democrats are expected to fight for the party's nomination against more-moderate candidates. A left-wing president could portend higher taxes, more regulation, and stricter corporate oversight.

But investors shouldn't overweight left-wing Democrats' success in local races, said Brian Gardner, Stifel's chief Washington policy strategist.

Gardner cited the 1996 and 2012 Republican presidential nominees, who came from the more traditional wing of the GOP despite the victories of insurgents during the midterm elections a couple of years earlier.

"We've gone down this road before when we have a wave election and ideological candidates win their races," Gardner said. "That does not necessarily follow through to the presidential election."

Left-wing leaders are likely to spend the next two years striving to prove that this time is different.