US: Tennessee Special Elections Adds To Democrats' Midterm Optimism

Republican Matt Van Epps won a special election in Tennessee’s 7th Congressional District. While the GOP avoided a shock loss - which appeared possible following a Democratic overperformance at off-year elections in November - the narrow margin of victory will increase Democratic optimism of flipping the House in 2026.

• Van Epps defeated Democratic state Rep. Aftyn Behn by a reported margin of 9 percentage points - considerably closer than the 20-plus percentage points margin of former Republican Rep. Mark Green and President Trump in 2024.
• Ahead of the election, we noted a Van Epps win within five percentage points would “increase GOP anxiety that the party is heading for a midterm wipeout”. See: US: Democrats Downplay Prospect Of Shock Win In Tennessee Special Election
• While that was avoided, the underperformance prompted Polymarket to upgrade the implied probability of Democrats sweeping Congress in 2026 to 37%. CNN notes, “Democrats appear to be performing better electorally than they did in 2017. And Democrats went on in 2018 to win back the US House in a “wave” election.”
• Data from NYT shows every single county in the district shifted towards Democrats, suggesting weakness across Trump’s base. The result is consistent with four other special elections this year, which Democrats have overperformed 2024 by an average of 16 points (and Kamala Harris by 18 points).
• Democratic optimism should be tempered by the imperfect predictive nature of special elections: Turnout tends to be low, putting a higher premium on voter enthusiasm, which appears to favour Democrats right now, especially with Trump off the ballot. 

Figure 1: 2026 Balance of Power

Source: Polymarket