[HSBC: Stock Market May Correct Ahead of US Midterm Elections] HSBC's Chief Multi-Asset Strategist, Max Kettner, stated that a stock market correction is possible ahead of the midterm elections, driven by overheated market sentiment, waning fiscal stimulus effects, and rising uncertainty. Investors should consider moderately reducing their equity positions after the earnings season ends. Kettner, who has maintained a top-weighted overweight rating on equities since mid-March, noted that current positioning and market sentiment are approaching levels seen during the economic reopening trading period in 2021, while some US credit card data indicates that consumer spending has begun to slow. He pointed out that the fiscal stimulus from the "Big and Beautiful Act" is comparable to that of the 2009 financial crisis, but the stimulus is mainly concentrated in the first half of 2026, with limited incremental support available in the future. Regarding specific midterm election risks, Kettner pointed out that current polls show a close Senate race, increasing uncertainty surrounding AI and data center regulations. This uncertainty could drag down the entire technology sector, not just the divergence between semiconductors and hyperscale cloud service providers; technology stocks as a whole could be affected. However, he also believes that such a correction could present buying opportunities.
