Investment bank Jefferies said that for large technology companies investing heavily in building AI infrastructure, divided government—a split Congress—may be the best possible scenario.

The Jefferies research team said in a latest research report released on Monday: "A divided government may help advance a unified national AI policy, rather than fragmented regulations across states, ensuring AI innovation can proceed at high speed. This would bring significant benefits to large leading companies, especially those that have already won enterprise or consumer trust."

The team added: "At present, states are taking the lead in AI regulation, but the vast majority of implemented and proposed regulatory measures are generally moderate. AI safety-related bills in Congress continue to increase, but unless there is a major, highly alarming AI safety incident, the chances of such bills passing are slim. We believe the policy risks facing AI infrastructure construction and large model development are limited."

Jefferies listed the main technology companies that could benefit: Amazon (AMZN): "It can benefit no matter which type of AI model ultimately wins, adopting a model-neutral platform strategy." Alphabet (GOOG): "It gains more time to catch up in the AI model race by relying on Gemini 4 Pro and subsequent iterations." Microsoft (MSFT): "It has broad penetration in enterprise IT systems and the highest level of trust among enterprise customers." Oracle (ORCL): "It is becoming the fourth-largest enterprise cloud choice; if data center approvals and regulatory obstacles are eased, there is huge upside." CoreWeave (CRWV): "It is rapidly growing into a leading alternative cloud vendor, benchmarked against large hyperscale cloud giants; it excels at deploying Nvidia reference architectures while continuing to expand its software capabilities." Snowflake (SNOW): "The second-largest supplier in the AI data pipeline field." Datadog (DDOG): "As AI agents become more capable, the value of observability becomes crucial." Meta (META): "Muse and Meta business agent products will reignite growth momentum in consumer and small and medium-sized business operations."

Jefferies analysts wrote: "Of the 20 midterm elections after World War II, the ruling party lost House seats in 18 of them. With Trump's approval rating currently near 39% and support among independent voters at 24%, we expect Republicans to suffer seat losses."

The 2026 U.S. midterm elections will be held on November 3, with voters electing all 435 members of the House of Representatives and 35 senators.

For investors, which party controls Congress matters greatly. On October 3, 2026, in Vandalia, Ohio, Trump spoke at a campaign rally at the Butler-Vandalia Student Activity Center.

For the stock market, the core question is often not which party wins, but how much uncertainty there is around taxes, regulation, government spending, and other business-related policies. This is especially true now as investors position funds for the remainder of the president's term.

Historically, the stock market has often performed well in the year after midterm elections end. Truist Chief Strategist Keith Lerner pointed out: since 1946, after every midterm election, the stock market has posted positive returns over the following year. The highest return in the year after a midterm election came after the 1954 midterm elections, at 34%; the average gain in the year after midterm elections was 14.4%.