Wall Street Set For A Boost Whoever Wins The Midterms

The comments from Nigel Green come as Wall Street strategists increasingly argue the correction underway since June is entering its final phase, with a recovery likely once the election and other near-term pressures have cleared.

The S&P 500 closed last week at 7,580, less than 3% below its October record. History offers encouragement: the index has gained around 17% on average in the 12 months following a midterm vote.

Republicans currently hold both the House and the Senate. Forecasters favour Democrats to win the House, while the Senate remains finely balanced.

Near-term turbulence remains possible. Close races can take days to call, and markets may stay jittery in the meantime.

Liquidity is the other big pressure point. Longer-dated Treasury yields have climbed more than 100 basis points since February, energy costs are elevated, and the Federal Reserve under Chair Kevin Warsh is firmly focused on getting inflation back to 2%, though it has raised rates only once since he took office.

AI, with concerns over financing costs, capital availability, and local resistance to data centres is also expected to intensify over the coming weeks before easing.

The impact will reach far beyond Wall Street and American shores.

US companies make up roughly two-thirds of global equity benchmarks, meaning Wall Street's direction shapes pension funds, savings and investment portfolios worldwide.

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