Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Open platformOpen platform

LIVE MARKETS-Tariffs, geopolitics and AI: what if Democrats win?

By Reuters News

Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com

TARIFFS, GEOPOLITICS AND AI: WHAT IF DEMOCRATS WIN?

Investors are weighing what a so-called Democratic sweep in this week's US midterm elections could mean for markets. Kairos strategist Alessandro Fugnoli believes a Democratic Congress could create greater political friction in Washington, but practical constraints mean investors should not expect dramatic changes on trade, public finances or AI.

Below are views from a Kairos note last week, framed as answers to questions investors may be asking.

  • What about geopolitics? "In general, a Democratic Congress would take a harder line on both Russia and China", putting it at odds with Trump's approach. While Congress would not determine foreign policy, Fugnoli argues a Democratic victory could increase pressure for a tougher stance, making any negotiation more complicated.

  • Can tariffs really be rolled back? Not necessarily. Fugnoli says economics may trump politics. "The problem for Democrats is that scrapping Trump's tariffs would leave a hole of more than $200 billion in the budget." He also sees limited implications for public finances from a possible Democratic push for higher welfare spending and a higher minimum wage, with the effect on the federal deficit limited to an increase of "around two or three tenths of a point."

  • Is AI regulation a genuine threat? Fugnoli thinks those fears are overdone. "There will certainly be hearings and investigations, but concrete action is unlikely." Support for AI remains bipartisan at the federal level because of its importance for national security and US leadership, meaning "the data centres will get built, even if there are some delays along the way."

To conclude, Fugnoli says: "Trump will not become a lame duck, and Democrats will make life difficult for him in Congress. The next two years look set to be turbulent."

(Danilo Masoni)

*****

EARLIER ON LIVE MARKETS:

THE BOJ ACCIDENTALLY MADE $440 BILLION IN STOCKS CLICK HERE

AI VOLATILITY IS THE NEW NORMAL, SAYS UBS CLICK HERE

STOXX DRAGGED DOWN BY WEAKER ENERGY, HEALTHCARE CLICK HERE

EUROPE BEFORE THE BELL: TECH REBOUNDS, ALSTOM SLUMPS CLICK HERE

MARKETS HOPE FOR RELIEF IN APPLE MARGINS CLICK HERE

Capital.com is an execution-only brokerage platform and the content provided on the Capital.com website is intended for informational purposes only and should not be regarded as an offer to sell or a solicitation of an offer to buy the products or securities to which it applies. No representation or warranty is given as to the accuracy or completeness of the information provided.
The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.
To the extent permitted by law, in no event shall Capital.com (or any affiliate or employee) have any liability for any loss arising from the use of the information provided. Any person acting on the information does so entirely at their own risk.
 

Cryptocurrency-related content is intended solely as news and market commentary. Crypto Derivatives are not available to Retail clients registered with Capital Com (UK) Ltd.