US election results and their likely impact on defence, energy, Canadian

HANetf writes that with Democrats looking set to take control of both the House and Senate, the US midterm elections have potentially significant implications for financial markets. 

Experts from HANetf’s partners VettaFi, Middlefield and GinsGlobal have offered their views on what the election results mean for defence stocks, energy infrastructure, Canadian equities and US technology.

Jane Edmonson, Head of Index Product Strategy at VettaFi, says: “US defence stocks have sold off ahead of the 2026 midterm elections over concerns that a Democratic takeover of the House could thwart or scale back the Trump administration’s aggressive USD1.5 trillion military budget proposal.

“While investors fear a shift in congressional control could counter high-profile Trump administration priorities—such as the proposed USD1.5 trillion defence budget, fleet expansions, and/or missile defence projects, these concerns may be overblown given bi-partisan support for defence spending.

“Despite political friction over budget increases, underlying demand and bipartisan backing for core military needs—such as the replenishing missile stockpiles — have strong bipartisan support from a national security standpoint.

“A Democratically controlled House would likely be supportive of ongoing aid for Ukraine. However, the prolonged conflict in Iran is politically unpopular at home and abroad. A change in Congressional control could spur efforts to end the conflict.

“Finally, Democrats have generally been more supportive of NATO and cooperation with Europe. That has mixed implications for European defence names.”

Stacey Morris, Head of Energy Research at VettaFi, says: “With an ongoing energy crisis, politicians are broadly interested in trying to keep fuel prices down. It’s unlikely that the election would result in more regulatory headaches for energy.

“There is a bipartisan permitting reform bill in the Senate, which would ease the path for future interstate pipeline projects. It would be nice if that could pass in the lame duck period.

“Permitting reform could be a more lasting fix for some of the hurdles major pipeline projects have faced in the past and could address concerns for a tougher regulatory environment if the White House changes hands in the next presidential election.”

With views on Canada, Dean Orrico, President & CEO of Middlefield, portfolio manager of the Middlefield Canadian Enhanced Income UCITS ETF, comments: “Markets generally experience elevated volatility in the months leading up to a midterm election but tend to strongly rebound once uncertainty clears. Since 1986, Canada’s S&P/TSX Composite Index has been positive in the six months following every US midterm election. Canada is no longer waiting on Washington. Under Prime Minister Carney, Ottawa has moved from managing trade risk to building around it by fast-tracking major projects, lowering the cost of new investment and deepening ties with Europe and Asia. That self-help agenda is drawing significant capital into Canada. Our portfolio has limited exposure to tariff-sensitive industries, and is anchored in energy infrastructure, banks and real assets, leaving us positioned for this buildout regardless of the final election outcome, with further upside if trade tensions ease.”

Turning to technology and, in particular, to the megatrends, Anthony Ginsberg, manager of the ITEK HAN‑GINS Tech Megatrend Equal Weight UCITS ETF, says: “It looks like the Democrats have taken the House of Representatives in Congress (US lower house) and the Senate.

“Ultimately President Trump’s ongoing foreign policy re the Mideast and Tariffs, will not be impacted to the extent many believe following the Midterms. The US President has tremendous sway in this area. Where his power is curtailed in Congress – this will directly impact Domestic matters more – including the Budget, taxes and such key issues such as Healthcare, Fiscal reform and Military spending.

“The US economy remains resilient with 2.5 per cent GDP growth expected for 2026. US Tech should continue to perform well – given the reduction in regulation and the White House’s flexibility to continue with M&A, IPOs and related tech corporate activity.

“The upcoming Anthropic IPO should boost further interest in the Tech sector here. Beyond the Mag7 – tech valuations remain very reasonable with ITEK’s average P/E holding sitting close to 20 per cent earnings. We expect very healthy third quarter earnings shortly, close to 30 per cent YoY earnings gains. SpaceX just reported their first profits as listed company.

“Continued capex spending on AI and Cloud – given the Trump tax concessions on infrastructure spending – will very likely continue through his remaining two years in office.”

Ginsberg was a recent guest on the ETF Express Off the Record podcast discussing tech megatrends. You can listen to that episode here.