The US midterm elections in November 2026 are shaping up as a referendum on President Trump’s second term. In its Ahead Of The Curve series, TD Cowen’s Washington Research Group argues for a base case scenario of a divided government, with a Democratic House and a Republican Senate. It suggests that this scenario would amplify oversight, investigations, and debt-ceiling brinkmanship, but leave little room for major policy changes.
The November Rain: US Midterm Elections report’s authors, driven by Chris Krueger of TD Securities, note that the base case would see a Democratic House investigating tariffs, federal spending, the Iran war, critical minerals investments, and more, with reputational risk for any Trump-branded initiatives.
The base case also sees President Trump maintaining control of the Executive Branch, however, meaning that trade policies, tariffs, permitting, energy policy, and so on would be driven by the White House.
Impacts on clean energy momentum
Looking at the energy transition, John Miller from the Washington Research Group notes that he expects the 2026 midterms to impact the direction of energy, power, transport, infrastructure, and critical minerals policy for the two years leading up to the presidential elections.
Miller says that under the base case scenario, Democrats would seize the opportunity to build an anti-Trump policy platform, rendering Congress unable to pass legislation that isn’t immediately necessary. This means changes to energy tax policies or manufacturing production tax credits might not happen.
Trump’s White House has been particularly active in passing critical minerals policies, driving financing, equity investments, and offtake agreements. Under the team’s base case scenario, enhanced White House oversight will mean more investigations into legal, political, and reputational risk that could potentially lead to reduced corporate appetite for future transactions and even slow the pace of sector development.
The base case scenario sees heightened interest in green energy sectors, including renewable energy, energy storage, and electric vehicles. However, Miller says this would be limited in scope and scale, with enthusiasm dissipating by February or March 2027 following Trump’s State of the Union address.
In the event of a Republican House, Miller predicts enhanced interest in oil and gas production, fossil fuel-fired power generation, and midstream infrastructure development.
Copper, aluminum, and gold face headwinds
With regard to commodities, Bart Melek and Ryan McKay write that policy decisions have driven up the energy and metals markets this year, with the 2026 midterms having the potential to significantly impact the further evolution of these markets.
“The fundamental question is whether Congress will exercise more influence over policies surrounding foreign policy, critical minerals, energy, and interest rates than it currently does, if there is a compositional tilt away from the President’s party,” Melek and McKay write.
A divided Congress under the base case could likely see less tariff rhetoric and fewer trade conflicts, more pressure to end the Iran war, and a more cautious approach to controlling the policy of the Federal Reserve.
This would result in less commodity market volatility, with crude oil risks shifting to a more regional context. Copper and aluminum prices would be lower, while gold and silver prices would have a less pronounced upward trajectory.
Ultimately, TD Cowen’s analysts argue that the 2026 midterms are less about sweeping legislative change, and more about oversight and managing volatility. A divided Congress would sharpen scrutiny of Trump-era initiatives and temper commodity market risks while leaving the White House in control of trade, tariffs, and energy policy.
Write to Amy Rotman at Mining.com.au
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