St James's Place sees limited market impact from Democratic midterm sweep
SPY•St James's Place said a Democratic sweep in the 2026 midterms would likely limit President Donald Trump's scope for major policy changes. It said US fiscal deficits are likely to persist at 6-7% of GDP, while economic growth, inflation, interest rates and corporate earnings are expected to matter more for market returns than the election outcome.
1. Election and markets
St James's Place's Nov. 4 analysis said Democratic control of Congress could limit President Donald Trump's scope for major policy changes. Greater fiscal discipline could contain upward pressure on Treasury yields, though deficits are likely to persist at 6-7% of GDP. Renewable energy could benefit from a more supportive Congress, while oil and gas producers could face tighter environmental controls; technology companies could face greater scrutiny of AI, though major regulatory changes would encounter political and legal hurdles. The firm said economic growth, inflation, interest rates and corporate earnings are expected to matter more for future market returns than the election outcome.
