2026 has already been one of the strongest years for US listings in a generation. Q2 2026 was the biggest quarter for US IPOs on record at $104.8 billion. Yet heading into November, the market has gone quiet. Once the votes are counted, several forces could combine to make 2027 an even bigger year for companies going public.5
The election is a major source of uncertainty holding deals back.
Issuers aren’t waiting because demand has disappeared. They’re waiting for the political calendar to clear. Bankers concede that marketing IPOs has become much harder, partly because of the upcoming midterms, and investors have become more selective. PwC also notes that uncertainty ahead of the midterm elections may be influencing timing decisions. That pause should be temporary. Once results are known, that source of uncertainty goes away whichever party wins.1,2
Markets have historically rallied after midterms.
IPO windows open widest when stocks are rising, and the post-midterm period has a strong record. Merrill notes that in all available data since 1928, the S&P 500 has risen 92% of the time in the 12 months after a midterm election. Russell Investments finds that in the 180 days after midterm elections, risk aversion has typically fallen by a standard deviation and the S&P 500 has rallied around 8%. A rising market gives issuers the confidence to price, and gives investors the appetite to buy.3,4
A large backlog of deals is waiting.
Many companies that planned to list in 2026 have pushed their timelines back. Several high-profile candidates, including OpenAI, Databricks, Kraken, Plaid and Monzo, have mostly slipped to 2027. Beyond the big names, PwC sees a significant backlog of private companies still seeking liquidity, and successful execution by the current pipeline could support continued issuance into 2027. Deferred demand from issuers plus a clearer calendar could produce a busy first half.5,2
Gridlock preserves a policy backdrop markets already understand.
A divided Congress is unlikely to pass sweeping changes to taxes or market regulation. Russell expects that a gridlocked legislature looks likely, and that the policy status quo is favorable for markets. Morgan Stanley adds that key recent market drivers such as tariffs, tax policy and deregulation would remain broadly in place, even with a shift in Congress. For companies planning a listing, predictability matters as much as any single policy.4,6
For companies planning a listing, predictability matters as much as any single policy.
The 2026 IPO class has performed well.
Investor appetite depends heavily on how recent listings have traded. General Atlantic notes that US IPO share prices are up 22% on average for the year to date and expects that as IPOs keep pricing and trading well, discounts should narrow in the second half of the year, setting the stage for a potentially constructive IPO market in 2027.7
The counterarguments investors should weigh
History isn’t a guarantee. U.S. Bank cautions that stocks did not rise after every midterm, and historical averages don’t guarantee gains after the 2026 election.8
Rates and fiscal fights could get in the way. PwC points to rising interest rates and Treasury yields, weaker IPO aftermarket performance, and questions about the pace and durability of AI infrastructure spending as factors that have raised the bar. A divided Congress could also bring debt-ceiling and budget showdowns, which tend to unsettle markets.2,9
The window is selective. Many issuers, particularly software businesses without clear AI tailwinds, still face a wide valuation gap and lower risk tolerance from investors. And the largest risk to a wider IPO window for mid-cap companies is a high-profile IPO disappointment.10,7
Sources
- 1. Yahoo Finance
- 2. PwC
- 3. Merrill
- 4. Russell Investments
- 5. Dealroom
- 6. Morgan Stanley
- 7. General Atlantic
- 8. U.S. Bank
- 9. BNY
- 10. Deloitte
For information only; not an offer to sell or a solicitation of an offer to buy any security, and not investment advice.
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