Midterm Elections Could Reshape Scrutiny of Crypto, Defence and AI

Control of Congress could change who holds leverage over some of the largest US companies, with a Democratic win in either chamber opening the way for subpoenas, budget fights and new regulatory demands, Mint reported. President Donald Trump would keep his veto and broad authority over tariffs, immigration and federal regulation, limiting how far a divided government could go.

Key facts

• Morgan Stanley analysis shows the S&P 500 gained an average 23% in the year after midterms when a Republican president faced a split Congress, compared with 16% when Democrats controlled both chambers, according to Mint and CNBC.
• Trump’s 2025 One Big Beautiful Bill is projected to cut federal Medicaid spending by $911 billion through 2034, based on a KFF analysis of Congressional Budget Office estimates.
• The White House requested $1.5 trillion for national defence in fiscal 2027 and an extra $87.6 billion for fiscal 2026, mainly tied to military operations involving Iran.
• The Senate failed in September to advance the Trump-backed Clarity Act; Coinbase and Circle shares fell as much as 11% when it stalled, CNBC reported.
• Sen. Richard Blumenthal sought records on Oct. 21 from donors to Trump’s White House ballroom project, including Cisco, Salesforce, ServiceNow and Kraken; Apple and Nvidia each committed $25 million, per records obtained by The Washington Post.

Healthcare and defence budgets in play

New Medicaid work requirements are set to start from Jan. 1, or earlier in some states, under the 2025 law. Molina Healthcare drew $32.2 billion, or 75% of its 2025 premium revenue, from Medicaid, and warned in its Securities and Exchange Commission filing that losing or failing to renew government contracts on favourable terms could materially cut premium revenue, CNBC reported. Congress created a $50 billion rural health fund over five years, but KFF and providers have said it would not fully offset the Medicaid reductions.

Also read: Bitcoin Tops $87,000 as Weak September Payrolls Cut October Fed Hike Odds

For defence, Lockheed Martin draws about 70% of sales from the US government and recently reached a framework agreement with the Pentagon for 850 F-35 fighter jets over a decade. That deal is not final: Congress must authorise the multiyear purchase and fund it. Democrats could contest some Iran- and Israel-related spending while seeking more aid for Ukraine, though bipartisan agreement on China deterrence, nuclear modernisation and missile defence may shield other programmes.

Crypto rules and AI power costs

Congressional committees could press regulators through hearings and investigations. Federal regulators estimate a proposed capital overhaul would cut requirements for the largest banks by roughly 4.8%, CNBC reported, though the Federal Reserve writes the rules and Senate control shapes future vacancies. In crypto, wider Democratic leverage could bring stricter consumer safeguards, limits on yield-bearing stablecoins and closer review of Trump’s crypto businesses after the Clarity Act setback.

Also read: Fed Holds Rates at 3.75%-4% Days Before Midterms

Data centres are the most contested AI issue. Morgan Stanley expects Microsoft, Amazon, Alphabet and Meta to spend more than $1 trillion on capital projects in 2027. An October CNBC All-America Economic Survey found 63% of registered voters opposed a data centre within 10 miles of home, against 13% in favour. The House voted 417-3 in September to make state regulators consider having large data centres cover added electricity infrastructure costs; the measure stalled in the Senate 57-43 on a procedural vote after Democrats called it too weak.

Why it matters

A Democratic chamber could not repeal the 2025 tax and spending law alone, but must-pass budget talks give it points of leverage over Medicaid funding and defence programmes. Companies tied to Trump’s projects or tariff decisions would face document requests and public hearings, which Morgan Stanley’s Monica Guerra said create volatility through negative headlines. Jeff Buchbinder of LPL Financial said Democrats would likely push back on Medicaid cuts, which could steady enrolment for Medicaid insurers and patient volumes for hospitals.

What to watch

Prediction markets put a 94% probability on Democrats taking the House, with seat projections of 235 to 186, according to Hilbert Group, which cautioned that midterm polling has historically been unreliable. Hilbert said its desk is running relatively light on risk while watching the elections, the aftermath of the Binance hack and a US military build-up in the Middle East. Its chief investment officer, Russell Thompson, said he does not think a significant Democratic win is priced into Bitcoin. This is not financial advice; cryptocurrency and equity markets are volatile and outcomes are uncertain.

Written by

StockPil Editorial

The StockPil Editorial desk covers stock markets, business, finance, forex and crypto. Our AI-assisted newsroom builds each article from published, linked sources, checks it for accuracy before it goes live, and our editors review published articles and correct anything that needs it.

Sources: Mint, CNBC, Crypto Briefing