Trump's Efforts in US Midterm Elections Spark Policy Uncertainty, US Stocks Face Unresolved Policy Risks

According to sources, Ed Clissold, Chief US Strategist at Ned Davis Research, plans to coin a new term - Big MAC trading, which stands for Big Midterms Are Coming. He aims to summarize the core theme of the US stock market in 2026: the policy direction and its impact around the upcoming fall congressional elections.

US President Trump has intensively released a series of policy statements at the beginning of the year, indicating his focus on boosting the Republican Party's chances in the November elections, with policies targeting the hotly debated issue of American affordability. This trend could have a profound impact on the stock market. For example, last week, Trump demanded credit card issuers set the interest rate cap at 10% - less than half of the current average rate, causing bank stocks to plummet; he ordered defense companies to halt dividend payouts and invest in production, leading to a sharp decline in the defense sector; and after recent government attacks on the Fed's independence, Wall Street was engulfed in panic on Monday.

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

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