Investing.com -- Morgan Stanley released its first analysis of the upcoming November midterm elections on Monday, telling investors that while the elections may cause some sector-specific shifts, macroeconomic factors and the business cycle will remain the primary drivers of market performance.

The investment bank's report, titled "Mapping the Midterms: A First Look," examines potential policy outcomes with elections approximately six months away. The firm expects any policy changes to be incremental rather than sweeping, with focus areas including fiscal policy related to SNAP and Medicaid programs, artificial intelligence regulation, and energy policy.

Morgan Stanley identified Healthcare, Energy, Financials, Defense, and Consumer sectors as most likely to see concentrated impacts from post-election policy shifts.

For the banking sector, the firm said midterm results are unlikely to alter the current deregulation path for banks, advisors, and consumer finance companies. In healthcare, Medicaid policy changes represent a key variable, while gridlock could provide visibility for healthcare services companies.

The consumer sector faces potential impacts from changes to SNAP benefits, with delays or softened cuts identified as the primary policy variable. Lower-income consumers and related retail segments, including restaurants, food distributors, and food retail, show the highest sensitivity to SNAP policy outcomes.

In the energy sector, Morgan Stanley highlighted the energy mix as a focal point, with permitting processes, nuclear power support, and renewable energy policies serving as key variables.

The report drew on insights from a symposium held in New York last week featuring policy experts discussing the post-election landscape.