(Bloomberg) -- With nine months until the US midterm elections, Wall Street is starting to game out trading scenarios leading up to the November vote.

Top of mind is the American consumer, who is not all right, at least going by the latest sentiment surveys. Investors are eying trades that would benefit from efforts by the the Trump administration to lower the cost of living. That includes newfangled financial firms that may see higher demand as some tax changes and other cost-of-living policies are implemented, and homebuilders that would see an uptick if mortgage rates fell.

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President Donald Trump has already tried to push home borrowing costs lower by ordering purchases of mortgage-backed securities. Republicans cling to a narrow majority in the House of Representatives, and investors expect they will be inclined to back legislation that would address the threat of inflation.

“Populism is on the rise as part of the affordability focus as midterms approach,” said Drew Pettit, US equity strategist at Citi Research. “Affordability has a huge connection to credit. If you give people more money in tax refunds, if you put money into their bank accounts, they are still likely to use leverage in some sense, use financing or use credit to buy more of the things that they want,” Pettit said.

That’s why Citi launched what Pettit called a “tactical” trade basket that focuses on fintech companies active in consumer finance for lower income consumers, like Klarna Group Plc, Block Inc. and Intuit Inc. The group could see a tailwind from policies that make it easier for consumers to access credit, for example.

Citi is targeting fintech just as data showed consumer confidence fell to its lowest level since 2014, according to the Conference Board. That’s raised alarms in some corners of Wall Street that spending may start to flag, though sentiment surveys have been weak for months while expenditures have remained high.

Regardless, the displeasure among consumers has caught the attention of DC lawmakers, especially as Trump’s tariffs keep some prices elevated. Pettit says the playbook for weakness in consumer spending has long been to pile into cut-rate discounters. Not this time.

“Tariffs aren’t going away and the direct impact on margins for companies is importers and a lot of those import sensitive stocks just so happen to be consumer,” he said.

Investors haven’t gotten on board with that, so far. The consumer staples sector has climbed 9.2% this year and the discretionary group has risen 2.4%. Both have outperformed the S&P 500’s 1.9% advance.

Ned Davis Research is also making tweaks to its trading strategy as DC shifts focus to the midterms. Here, too, affordability is in, while policy priorities from the president’s first year – like financial deregulation benefiting cryptocurrencies – are out.

“The Trump administration is never idle for long,” Ned Davis strategists led by Pat Tschosik and wrote in a Jan. 28 note, describing the investment theme changes from 2025 to 2026.

The firm has added ETFs in homebuilding stocks, infrastructure companies and a fund that bets on a weak US dollar to its Trump trades for 2026 as economic growth, affordability and national security are likely to be the three key themes this year.

So far, those ETFs look like winner. The iShares US Home Construction ETF has climbed 6.6% this year, while the Global X Infrastructure Development ETF is up 7.6%.

Broader bets on the consumer, though, look perilous, according to Matt Miskin, co-chief investment strategist at Manulife John Hancock Investments. He points to the decline in consumer confidence and slower income growth, while noting that a problem is developing for the overall market as the consumer weakens.

“Markets are not priced for this. They’re priced for a meaningful acceleration in growth and inflation, in our view,” Miskin said by phone.

The consumer discretionary and staples are also expected to post some of the slowest earnings growth of any sector in the market this quarter, with the discretionary sector heading to 7.6% growth and staples at 6.8% in the three months through March.

Rather than a hot economy, investors may need to prepare for “a relatively frigid consumer backdrop,” he said by phone. Unless, that is, Washington can deliver some policy wins that address affordability.

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