STOCKS | HSBC Warns Against Betting on Midterm Election Gains: “Pain Is Still Ahead”

HSBC strategists warned investors not to bet on stock-market gains after the U.S. midterm elections, saying that “the pain is still ahead.” According to Sina Finance, a strategy team led by Max Kettner said historical comparisons suggesting stocks typically rise after midterm elections could be misleading this time, with risks including concerns about excessive AI capital spending and renewed escalation in the Middle East. The strategists said concerns about AI regulation could come into focus in the event of a Democratic “blue wave.” They favor developed-market duration assets across different election scenarios, remain bullish on the fundamental outlook for 2027 but say it is too early to position for it, and continue to underweight eurozone and U.S. technology stocks while favoring the equal-weight S&P 500 and U.K. stocks.