Companies heavily dependent on federal policy face shifting risks after the midterm election. Lockheed Martin draws 70% of sales from the U.S. government. Molina Healthcare generates 75% of its 2025 premium revenue from Medicaid. Coinbase awaits congressional rules on cryptocurrency.

A Democratic victory in either or both chambers would give the party new leverage to investigate companies and demand legislative concessions. President Donald Trump retains veto power and broad authority over tariffs, immigration and federal regulation.

Historically, stocks have performed well under divided government. Under Republican presidents, the S&P 500 gained an average of 23% in the year after midterms when Congress was split, compared with 16% when Democrats controlled both chambers, according to Morgan Stanley analysis published Thursday. But some analysts caution against assuming that pattern will repeat. "We don't think that blueprint holds up this time around, and we still see plenty of reasons to be constructive on the U.S. equity market," said Ariana Salvatore, head of U.S. public policy research at Morgan Stanley.

Control of either chamber would give Democrats committee gavels and subpoena power. Democrats have already signaled interest in investigations involving companies including Cisco, Salesforce, ServiceNow, Kraken, Apple and Nvidia, according to records obtained by The Washington Post.

Trump's 2025 tax cuts and spending law is projected to reduce federal Medicaid spending by $911 billion through 2034, according to a KFF analysis of Congressional Budget Office estimates. A Democratic-controlled chamber could use budget negotiations to seek funding changes or delays to some cuts. "They're probably going to push back on those Medicaid cuts," said Jeff Buchbinder, chief equity strategist at LPL Financial.

For defense contractors, Congress must authorize and fund multiyear purchases. Lockheed Martin recently reached a framework agreement with the Pentagon covering 850 F-35 fighter jets over a decade, but the agreement requires congressional authorization and funding.

For crypto companies, the midterms could determine whether Trump's regulatory shift becomes durable law. The industry's push for permanence stalled in September when the Senate failed to advance the Clarity Act, a sweeping market-structure bill.