On November 3, Americans vote on all 435 House seats, 35 Senate seats and 36 governorships. President Trump is not on the ballot, but his agenda is. For anyone hiring AI engineers, machine learning researchers or senior software talent, the result matters less for what it changes overnight and more for how it moves three things: the cost of capital, the rules on visas, and the confidence of the people who sign off on headcount.
The backdrop: a Fed that just raised rates
On September 16 the Federal Reserve lifted the federal funds target range by a quarter point to 3.75% to 4%, its first hike since 2023, on a unanimous 12 to 0 vote. Chair Kevin Warsh noted that job gains had kept pace with the workforce, then gave the reason for moving anyway: “inflation remains elevated.”
The data since has not made the Fed’s job easier. September CPI rose 0.6% for the month and 3.7% year over year, with gasoline up 9.1% as Middle East supply worries pushed oil higher. Core inflation came in at 2.6%. The Fed’s next decision lands on October 28, one week before the vote.
Higher rates hit tech hiring through one channel above all: funding. On October 16 the Nasdaq fell 2.15% in a single session and the Philadelphia chip index logged its eighth straight decline, its longest losing streak since 2008, as investors questioned whether debt-heavy AI infrastructure companies can turn a profit before borrowing costs climb further. When the market asks that question about a company, the CFO asks it about headcount.
The labor market: soft overall, strong in tech
The broad jobs market is cooling quickly. September payrolls rose by just 29,000 against 90,000 expected, and unemployment ticked up to 4.2%.
Yet demand for tech talent is at a three-year high. CompTIA’s analysis of September data counted 625,633 active tech job postings, up 22.4% on a year earlier, along with 349,821 active postings asking for AI skills. Tech unemployment sat at 3.3%, well below the national rate.
“[T]here is still strong demand for the core IT skills that can help companies build digital discipline and advance AI adoption.”
Seth Robinson, Vice President of Research, CompTIA
In plain terms, companies are trimming generalist roles while competing harder than ever for people who can ship AI into production.
Three midterm scenarios for hiring
As of mid October, Democrats led the generic congressional ballot by roughly 7 to 9 points in most national averages, and Decision Desk HQ gave them a 76% chance of winning the House and a 56% chance of taking the Senate. Polls can miss, so plan for each outcome.
1. Republicans hold both chambers. The clearest path for the administration’s agenda, including further tax and spending measures. Markets may price in larger deficits and higher Treasury yields, keeping pressure on rates and venture funding. Expect continuity on AI and immigration policy.
2. A divided Congress. Democrats win the House while Republicans keep the Senate. Expect fewer large fiscal bills, harder budget fights and more oversight hearings, AI included. Hiring plans tend to hold steady because the policy picture freezes.
3. Democrats win both chambers. The biggest shift in control, though the President keeps his veto. Expect louder debate on AI regulation and worker protections, and a Senate that could slow nominees.
In every scenario, tariff policy stays largely in the President’s hands, so trade costs are unlikely to swing sharply on election night.
Visas: the issue to watch for AI teams
In September, President Trump extended his order imposing a $100,000 fee on new H-1B visas by another year. A federal judge ruled in June that the fee was illegal and blocked its collection, and a Boston appeals court is now reviewing that decision. Which party controls Congress will shape whether any version of it becomes law. If your ML team relies on international talent, budget for longer timelines and build a domestic pipeline alongside it.
What history says about the months after a midterm
Since 1950 the S&P 500 has averaged a 15.4% return in the year after a midterm, according to Capital Group, and Fidelity notes positive 12-month returns 95% of the time. Past performance guarantees nothing, but once political uncertainty fades, decisions get made. We see the same in hiring: roles that sit “on hold until after the election” are often approved in late November and January, all at once.
What we are telling our clients
- Do not freeze. The best AI engineers are interviewing now, and December offers mean January starts.
- Lock in senior hires before Q1 budgets reset. Rate hikes have not cooled demand for AI talent.
- Price for a tight market. A cooling national jobs number does not mean cheaper AI engineers.
- Map your visa exposure. Know which hires depend on H-1B outcomes and have a plan B.
The midterms will shape the next two years of policy, but the AI talent race will not wait for the results.
Hiring AI or tech talent in San Francisco, New York or Boston? Talk to Big Wave Digital about your 2027 hiring plan.
Sources: Federal Reserve FOMC statement, September 16, 2026; Chair Warsh press conference transcript; CompTIA Tech Jobs Report; CMC Markets midterms analysis (October 12, 2026); Bureau of Labor Statistics CPI and Employment Situation reports for September 2026; Reuters market and H-1B coverage, September and October 2026. Hero photo by MUHAMMAD NABEEL on Unsplash.
