Oct 30, 2026 · 1h 25m
AI selloff raises stakes for US midterm markets
Market wrap and a big US mid-term preview.
The episode connects immediate pressure on technology stocks and geopolitical risk with the broader political and economic consequences of the US midterm elections.
- 1AI-related stocks led another sharp selloff as broader markets weakened.
- 2Disappointing Amazon and Intel results added pressure to an already fragile technology sector.
- 3The US midterms could reshape market expectations, American politics, and longer-term social tensions.
Don't miss
The episode’s key turn is from a sharp technology-led market selloff to the wider political and social stakes of the US midterms.
The brief
John J. Hardy opens with a delayed Friday edition and a market under pressure, as another sharp selloff in AI-related stocks spreads weakness across broader equities.
Disappointing results from Amazon and Intel deepen the technology-sector strain, turning company-specific news into a wider test of investor confidence.
Renewed concern over the Iran war adds geopolitical risk to an already unsettled market, complicating the outlook beyond earnings and valuations.
The episode then shifts from the immediate market wrap to the upcoming US midterms and their possible effects on markets and American politics.
Its longer view asks how the election could influence economic expectations and expose deeper social themes that extend beyond the next trading session.
What was said on this episode
33 statements · 16 positive · 13 negative · 1 mixed · 3 neutral
Democrats are overwhelmingly likely to win control of the House.
“The House is overwhelmingly likely to go to the Democrats.”
Listen at 22:18
Democrats are favored but not certain to win the Senate.
“It does look like it's favored, but that's far from a certainty, sort of a two-thirds against a one-third outcome”
Listen at 22:26
U.S. democratic institutions will likely withstand election-related pressure.
“My instinct is to believe that they hold.”
Listen at 33:08
A conservative scenario gives Democrats a 225–210 House majority.
“would be a result looking like 225 Democrats to 210 Republicans”
Listen at 34:29
A strong Democratic wave could produce a 240–195 House result.
“The sort of wild blue wave scenario, I would say, is something more along the lines of 240 to 195”
Listen at 34:48
Senate control is substantially more uncertain than House control.
“The Senate, far more uncertain picture.”
Listen at 38:52
Democrats could gain Senate control by flipping four Republican seats.
“the Democrats can flip four seats and get 51 seats in all to the Republicans. 49.”
Listen at 39:20
Democrats have a 60–65% chance of winning the Senate.
“we still favor it to end up in the Democrats' hands. So 60 to 65 percent”
Listen at 41:34
Democrats are favored to win Senate control.
“We still favor it to end up in the Democrats' hands.”
Listen at 41:34
A Democratic blue-wave outcome has 60–65% probability.
“So 60 to 65 percent, we see a blue wave scenario of some scale of some strength”
Listen at 41:38
There is a 95% probability that post-election gridlock will occur.
“and a 95 percent probability in all. of the gridlock scenario”
Listen at 41:44
A large Democratic victory could slow U.S. AI data-center deployment.
“a massive blue wave might mean a more skeptical take on the ability of AI data centers to get licensing and to be plugged in, which is a speed limiter on the AI buildout”
Listen at 42:53
AI-caused hacks and liability could threaten AI companies’ rollout and revenue models.
“if there is a hack, and it is shown that it is caused by an AI agent, Who made that AI agent and who is liable, if anybody, could be a risk to some of the rollout, the revenue models of some of the key companies”
Listen at 44:02
Elon Musk’s companies could suffer under a strong Democratic wave.
“There are the Elon Musk companies, which I think suffer more under heavier blue wave scenarios”
Listen at 45:01
A Democratic wave would reduce political pressure on the Federal Reserve.
“the Fed as an institution will be less under attack in the mix all through this if there is a blue wave”
Listen at 46:32
A strong Democratic wave could intensify investigations of Trump and his family.
“corruption investigations of Trump and his family”
Listen at 46:57
U.S. industrial-policy and supply-chain shifts will continue without Trump.
“the general drift would be the same”
Listen at 52:16
The Iran war could resume soon after the midterm elections.
“we could see war resume very quickly after they are over”
Listen at 53:12
Europe should adapt its military armament to modern asymmetric warfare.
“It needs to arm in a very different way”
Listen at 57:59
The U.S. and China could reach an accommodation over Taiwan.
“maybe we should have hope that the US and China can move to some degree toward a grand bargain about control of Taiwan”
Listen at 58:41
There is roughly a 25% chance of efforts delaying election certification.
“25% chance, let's say, that there's some kind of effort to delay things”
Listen at 1:10:51
A systemic overthrow of U.S. government is much less likely than procedural delay.
“a much lower delta that this actually looks like something that is going to really seriously put an existential risk of the U.S. system of government being overturned”
Listen at 1:10:58
AI expansion is constrained by data-center and grid capacity.
“the limitation is on data centers and grid capacity”
Listen at 1:13:27
Forward P/E valuations reflect concerns about technology and AI pricing.
“The market shares those concerns when you look at forward PEs.”
Listen at 1:14:08
AI-related financial assets may suffer a significant break within three to six months.
“I think it's more like three to six where we see within three to six months, we see some kind of significant break, if not ugly break in the whole story.”
Listen at 1:14:20
AI-related financial assets may suffer a significant break within three to six months.
“within three to six months, we see some kind of significant break, if not ugly break in the whole story”
Listen at 1:14:22
Materials, commodities, and infrastructure are attractive long-term exposures.
“I do like materials, commodities, and infrastructure on this geostrategic issue”
Listen at 1:15:11
Bonds may offer attractive short- to medium-term returns relative to inflation.
“I think there could be some more there, short to medium term. They give far better return relative to inflation than they have in a long time.”
Listen at 1:15:27
A socially moderated left-populist coalition could reduce U.S. inequality.
“there's a much more powerful coalition in the U.S. to square away some of the inequality there is in the U.S.”
Listen at 1:16:34
Extreme wealth concentration and asset gains are nearing a major social inflection point.
“I think we're getting to the blow-up point”
Listen at 1:17:32
Younger wage earners’ prospects will improve relative to asset-owning wealthy people.
“the prospects for younger and wage earners is going to improve from here relative to the wealthy and those that are living from investments and asset markets”
Listen at 1:17:55
Investors should position for improving prospects of younger wage earners.
“Position yourself accordingly would be my – or I want to position myself accordingly”
Listen at 1:18:07
A major policy and financial pivot is likely within four years.
“I do think that pivot is coming sometime within the next four years, let's call it”
Listen at 1:21:41
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
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