Two Months Before U.S. Midterms: Are Trump-Linked Stocks Losing Steam? [Weekend Money]

Probability of Democratic Victory in November U.S. Midterms Rising

Temporary Loss of Momentum Likely for Trump Beneficiary Stocks Such as Cryptocurrencies and Large Banks

U.S. President Donald Trump

With only two months remaining before the U.S. midterm elections, there are forecasts that should the Democratic Party achieve a major victory, stocks related to U.S. President Donald Trump—such as those tied to cryptocurrencies and large banks—could experience temporary declines.

On September 6, Hyundai Motor Securities analyst Kim Jaeseung stated, "President Trump’s approval rating has dropped to its lowest level since he took office," and analyzed, "A Blue Wave, in which the Democratic Party becomes the majority not only in the House but also in the Senate, could occur in the U.S. midterm elections on November 3."

Analyst Kim noted, "On Polymarket, the probability of the Democratic Party winning both the House and the Senate has risen to 51%. The market generally regards a Democratic takeover of the House as the baseline scenario, and now factors in an approximately even chance that they will win the Senate as well."

He continued, "Even if Democrats gain control of both chambers, it would be difficult to pass their initiatives—such as corporate tax increases, raising taxes on high-income individuals, tariff reductions, expanded healthcare support, or regulatory bills targeting big tech and large banks—because of the presidential veto. However, the possibility of increased congressional investigations into companies, delays in the implementation of Trump administration policies through confirmation powers, and a higher risk of government shutdowns during budget negotiations could all increase."

He added, "If the Democratic Party controls Congress, congressional investigations and demands for information from big tech and large banks could intensify, and in particular, companies with close ties to the Trump administration may be exposed to greater political risk."

He also pointed out, "During budget negotiations, the Democrats’ bargaining power would strengthen, increasing the chances of conflict with Trump over the debt ceiling and fiscal policy. The prospect of a prolonged government shutdown grows. Such clashes between Congress and President Trump could weaken the momentum of his policies, making it likely that stocks of sectors seen as beneficiaries of the Trump administration—including cryptocurrencies, large banks, companies involved in government contracts, and fossil-fuel-related firms—would face temporary downside risks in the event of a Blue Wave."

This content was produced with the assistance of AI translation services.