BofA's Hartnett warns: If Democrats "sweep" the midterm elections, US stocks could fall over 10% and burst the AI bubble.
Bank of America Securities Chief Investment Strategist Michael Hartnett, in his latest "Flow Show" weekly report, pointed out that soaring global bond yields are threatening the AI capital expenditure boom, and the upcoming US midterm elections could be the trigger for market volatility. He believes that if Democrats sweep both chambers of Congress, the US stock market could face a decline of over 10%, the dollar would weaken, bond yields would fall, and the AI bubble would risk bursting. Hartnett characterized this scenario as one of the biggest tail risks in the current market, yet investors have barely priced it in. Data from Polymarket shows that the probability of a Democratic sweep of both chambers has risen to 50%.
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Disclaimer: This content reflects the author's personal views only and does not constitute investment advice.
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