Democrat Sweep Could Lead to U.S. Political Gridlock -- Market Talk

0919 GMT - The Democrat wave turns President Trump into a lame duck for his final two years and threatens political gridlock, Berenberg's Holger Schmieding says. While both parties could lift the debt ceiling--after some huffing and puffing to avoid protracted government shutdowns--congress will likely prevent a new fiscal stimulus, he says in a note. Beyond the likely slowdown in AI investment growth, this will dampen GDP growth towards a pace of around 1.5% in 2028, meaning the U.S. will contribute less to global growth than before, he says. The size of the swing against Republicans could raise concerns about more regulation to come, though voters' rejection of Trump's penchant for crony capitalism shows U.S. checks and balances work. "That is a positive, in my view," Schmieding adds (edward.frankl@wsj.com)

(END) Dow Jones Newswires

November 04, 2026 04:19 ET (09:19 GMT)