Could the US midterms cause a surprise stock market rally?
Investors have a lot on their plate. Oil, inflation and interest rates are climbing, while tech stocks are volatile amid growing fears of an AI bubble . Throw in US President Donald Trump's unpredictability, mounting government debt, regional wars and stretched stock valuations, and it’s all getting a bit much. Now comes another challenge: Americans go to the polls on November 3 for the midterm…
The US midterm elections on November 3 could potentially lead to a stock market rally, according to historical data. Over the past 12 months following every midterm since 1950, the S&P 500 has risen on average. Investment professionals suggest that a divided Congress could result in gridlock, limiting potential sweeping changes to tax and regulation that might negatively impact stocks.
However, a divided government might also mean less interference from Washington, allowing businesses to operate more freely. If the Democrats gain control of both the House and Senate, they may prioritize social issues over economic policy. Investors should remain cautious, as many risks remain, including inflation, rising interest rates, geopolitical tensions, and the potential for an AI investment bust.
The US economy has shown resilience, with third-quarter GDP growth of 3.4%. Nonetheless, earnings growth remains uncertain, and political clarity alone will not compensate for disappointing commercial results.
Written by urgent.news from The National UAE's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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