Global equity capital markets are gearing up for a frantic few weeks, as IPO issuers rush to try and print deals ahead of any possible disruption around the US midterm elections.

Markets expect an acrimonious contest for control of the US Congress and there are fears over how US President Donald Trump might act in the wake of the vote, either by attempting to challenge the results or through impulsive action in other areas, such as foreign policy, should the Republicans suffer a bad night at the polls.

Several market participants speaking to ECM Pulse noted that the unknowns around the midterms meant that IPO candidates on both sides of the Atlantic would be aiming to price deals before the vote on Tuesday 3 November.

Given a late US Labor Day holiday this year, that means just 42 working days between the traditional start of the post-summer IPO window in Europe and the US and the vote.

Squeezed into that deal window is expected to be the listing of Anthropic, reportedly aiming for the largest IPO of all time at a gargantuan USD 2tn equity valuation.

This has prompted debate over whether other issuers will be able to manage to list businesses at the same time, as ECM Pulse wrote at the time of the USD 86.2bn listing of SpaceX.

While smaller IPOs that play to a specific niche are likely to still get a reception amongst that specific investor universe, larger deals that require wider investor participation might suffer from being in the market at the same time as Anthropic, noted an investor.

Source: Dealogic, US and European IPOs

The floatation of Franco-German tank manufacturer KNDS could fall into this category, as could the US IPOs of smart ring maker Oura and Roark Capital-backed Inspire Brands, the owner of several restaurant franchises including Dunkin’ and Buffalo Wild Wings.

“There’s a fear that SpaceX was so large, and Anthropic’s listing is going to be so large, that allocators are going to have to contribute so much of the wallet toward those two deals that there may be nothing left,” noted an ECM lawyer, adding that other IPO issuers would be in a hurry to get out ahead of the AI leviathan.

Other issuers may have to make their deals more compelling from a price perspective to get the investment they need to be comfortable of having strong enough IPO books.

“It will be interesting to see whether a supply/demand dynamic dislocates the market a bit,” noted a second investor. “If it does, valuations will need to come down for some of these other deals to get across the line.”

A third investor noted that anything with an AI angle might also struggle to differentiate with their idiosyncratic qualities at the same time Anthropic dominates attention. This could impact companies like AI infrastructure provider Nscale, for example.

“Anthropic is such a large, high-profile transaction that it risks dominating institutional capital, media attention, analyst coverage, and portfolio allocation,” the investor said.

Anthropic’s IPO is also coming at a pivotal moment for frontier large language model providers that many fear are becoming overvalued given growing competitive pressures from cheaper players.

This might mean more investor attention is given to an investment in Anthropic than SpaceX, which was partly carried over the line by institutional FOMO, retail hype, and changing index inclusion rules. While Anthropic will benefit from the last of these three factors, it has been notably quiet on the structure of any retail tranche and will likely face real investor scrutiny.

“Anthropic isn’t a clean equity story like it might have been a few months ago,” noted the first investor. “There are a lot of issues facing the sector.”

Midterm, Trump uncertainty persist

Ideally, IPO issuers and their advisors would try to spread out deals a little more over the last few months of the year.

In Europe, there are unlikely to be much more than six or seven sizeable IPOs across the quarter, according to a regional banker, which the second investor noted would be a “great result” for listings on that continent.

In the US, the pipeline is busier. A cohort of several deals in the USD 700m-USD 1bn-plus bracket are expected between mid-September and mid-to-late October across a variety of sectors, alongside a slew of large-cap tech IPOs, a fourth investor said.

He contrasted that with the second quarter, when a market up 15%-20% and a low-to-mid-teens VIX, coming off a rally that ran from the market’s mid-March bottom through the Fourth of July, helped carry deals through.

With September and October seasonally weaker for markets and the AI trade still heavily hedged heading into the midterms, this investor expects the window to be choppier.

However, few dealmakers want to run the risk of planning for an IPO after the US midterms. Still, several high-quality assets, he added, are holding back for a possible listing in mid-to-late November, December, or early 2027, added the same investor.

Midterm jitters are coming at a turbulent time for the US, following Treasury Secretary Scott Bessent’s much-maligned attempt to temper rising sovereign bond yields through aggressive buybacks.

It has done little to temper investor fears. The yield on US 30-year Treasuries is now at around 5.2%, having spiked to 5.3% on 17 August, the highest levels since the early 2000s.

The 10-year notes are hovering around post-crisis highs, making Bessent’s interventions look at best ineffective and at worst inflammatory. While equity markets remain robust, bond markets are flashing red warning signals.

All of which points to new Fed Chair Kevin Warsh likely steering the FOMC towards a rate hike later this month – increasing short term financing costs to temper inflation, but with an eye on flattening the rate curve.

“Enthusiasm remains high, but people are watching the risks closely,” noted a US-based banker. “What worries me is if the geopolitical landscape stays murky, if the bond market keeps diverging from equities, and if inflation and rate concerns persist. I think we’ll get more noise heading into the midterms in November.”

The last thing the US economy needs is political instability at a time when bond traders already seem to be losing faith. But instability seems to be the baseline expectation for most equity investors looking at the midterms.

Market participants speaking to ECM Pulse articulated a range of fears including election interference, drawn out legal battles, and US government paralysis through to a wounded President Trump becoming even more impulsive.

Equally the risk may turn out to be overdone, and the elections could come and go without any drama at all, giving some agile issuers a chance for late-year activity.

“The uncertainty is huge and it’s a fool’s errand to try and predict what Trump might do, which points to a quieter year-end, but equally of there being some stability following the midterms that might open a late window for some issuers in the US,” said the second investor.