Wall Street had no clear direction at midday Tuesday as investors followed the U.S. midterm elections and weighed the possibility of a shift in political power. Analysts expect greater volatility if control is shared between the two parties.
Technology stocks could face pressure if Democratic candidates make progress, particularly over proposals targeting data centers. Pimco has noted that some candidates for governor oppose data centers and have called for a moratorium on their development. The asset manager said it remains uncertain whether those proposals will become policy, but expects the political climate to create hurdles for expanding AI infrastructure and raise operating costs in the sector.
The federal debt ceiling is another concern. After it was raised to $41.1 trillion in July 2025, the limit could be reached in 2027. Reinsurer Coface warned that failure by Congress to agree on a further increase could result in an involuntary technical default.
Market movements were mixed. Oil prices fell amid expectations of diplomatic progress in the Middle East, while Apple shares dropped 3% as lower profit margins outweighed positive sales forecasts.
Historical performance offers a counterpoint to the uncertainty: Bloomberg noted that the S&P 500 has not fallen in the 12 months following a U.S. midterm election since 1950.
Sources: La Vanguardia.