The Financial Post reports in its Friday, Oct. 9, edition that investors are focusing on artificial intelligence regulation and government spending in health care and defence as the United States midterm campaign enters its final month.
A Bloomberg dispatch to the Post reports that polls show the Democratic Party is favoured to gain control of the House of Representatives and has an advantage in crucial Senate races. Securing at least one chamber would allow them to control committees for proposing legislation and conducting investigations.
Concerns about AI span across party lines, with voters fearing risks like job losses and rising electricity prices. Wall Street strategists anticipate tighter regulations from Democrats, potentially leading to increased selling pressure.
Morgan Stanley's Ariana Salvatore says, "The midterms will be critical not for the immediate risk of federal policy restricting datacentres but to lay the groundwork for potential legislation toward that end in 2029."
History suggests that whatever happens, the midterm elections are unlikely to knock the stock market off its course. The S&P 500 index has risen in the 12 months after every midterm election since 1946, according to Wells Fargo.
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