Global Markets Strategy

Latest edition · October 1, 2026

JPM Equity Thematic Strategy

J.P. Morgan analyzes the equity market implications of the upcoming 2026 US midterm elections across Gridlock, Blue Wave, and Red Wall scenarios. The authors provide bespoke stock baskets and suggest positioning for a pre-election volatility pickup ahead of what is typically a positive market-clearing event.

Ahead of the 2026 US midterm elections, betting odds and polling indicate strong headwinds for the incumbent Republican majority, raising the probabilities of a Democratic sweep or split Congress (Gridlock). In collaboration with over 30 equity research analysts, J.P. Morgan created five thematic baskets spanning Gridlock Beneficiaries (JPRGL26M), Blue Wave Beneficiaries (JPRBW26M), Red Wall Beneficiaries (JPRRW26M), Outcome-Agnostic Beneficiaries (JPRAG26M), and Government Spending Beneficiaries (JPRGSPEN). Equity options currently reflect minimal election premium, offering attractive entry to hedge or position for historical pre-election VIX increases. Across all scenarios, core themes such as the AI infrastructure buildout and defense spending are projected to remain durable.

Key takeaways from the latest edition

• 1.J.P. Morgan designed thematic equity baskets across three main midterm scenarios: Gridlock (JPRGL26M), Blue Wave (JPRBW26M), and Red Wall (JPRRW26M), alongside Agnostic Beneficiaries (JPRAG26M) and Government Spending (JPRGSPEN).
• 2.Betting odds and polls favor Democrats taking the House (92% Polymarket) and Senate (63%), but regardless of outcome, Presidential veto power and the filibuster will likely constrain aggressive statutory shifts, making midterms a market-clearing event.
• 3.Options markets are currently pricing a muted event risk premium around election day, presenting an opportunity to position for higher VIX ahead of the catalyst based on historical seasonal pre-election peaks.

What this series covers

• Equity Thematic Strategy
• Global Equity Strategy
• North American Equity Research
• Gridlock Scenario Beneficiaries
• Blue Wave Scenario
• Red Wall Scenario
• Midterm Election Outcome
• Midterm Election Baskets
• Midterm Betting Odds
• S&P 500 Fundamentals
• Midterm Election Performance
• Key Policy-Sensitive Thematic Baskets
• Appendix: Midterm Election Basket Constituent Summary

Edition archive

• JPM Equity Thematic Strategy

  October 1, 2026

• JPM India Equity Strategy

  September 30, 2026

• JPM Equity Strategy Tech

  September 28, 2026

• JPM Equity Strategy

  September 21, 2026

• JPM Brazil Equity Strategy

  September 20, 2026

• JPM Cross Asset Volatiliy

  September 16, 2026