Blue wave could rattle markets - Semafor

Analysts are warning that a strong Democratic showing in today’s midterms could drag down markets as investors brace for tougher tech oversight and tenser fiscal negotiations.

They also acknowledge it’s possible stocks get a bump: A Democratic House and Senate facing off with a Republican White House would restrict government spending and limit policy changes, soothing deficit worries and reducing regulatory uncertainty. Democrats could also push back on recent healthcare cuts, bolstering those stocks in return.

But Republicans holding one or both chambers would still be more positive for markets, according to JPMorgan.

The firm predicted this week that a blue wave would cause the S&P 500 to fall as much as 0.25% or rise as much as 0.5%, while a divided Congress would cause it to rise 0.5% to 1%.