Midterm Elections Approach, Trump's Policy Gambles Become Biggest Uncertainty for 2026 US Stocks

Odaily News According to Ed Clissold, Chief US Strategist at Ned Davis Research, who intends to coin a new term—the "Big MAC trade." This acronym stands for "Big Midterms Are Coming." He aims to use this concept to encapsulate what he sees as the core theme of the 2026 US stock market: the policy direction and its impact surrounding this fall's Congressional elections.

At the beginning of the year, US President Trump issued a series of policy-like statements in quick succession. These moves are sufficient to indicate that Trump is focusing on boosting the Republican Party's chances in the November elections, with his policy levers targeting the widely debated American "affordability crisis." The impact of this trend on the stock market could be extremely profound. Take last week's market performance as an example: Trump demanded that credit card issuers cap interest rates at 10%—a level less than half of the current average rate—and bank stocks immediately plummeted on the news; after he ordered defense contractors to suspend dividend payments and redirect funds into production, the defense sector also suffered heavy losses; and following recent government criticism of the Federal Reserve's independence, the entire Wall Street was plunged into panic on Monday.

Clissold wrote in the report: "Before the midterm elections, policy adjustments targeting specific industries will become a major risk," and currently, the market is unclear on how to hedge against such risks. (Jin10)