Bank of America strategist Michael Hartnett stated that if the Democrats control both the House and Senate, it could represent the biggest "safe-haven trade" scenario for US stocks: shifts in corporate tax and regulatory expectations would lower earnings forecasts, weakening the dollar and US stocks, while declining economic growth expectations could drive funds back to US Treasuries. Hartnett believes this could also impact the current AI rally, which is supported by the wealth effect and massive capital expenditures.
