US elections and the impact of their results on the stock market

At the moment, the most discussed topic is the midterm elections to the United States Congress.

The situation is quite complex and according to most forecasts, as a result of these elections, Republicans have a fairly high chance of replacing Democrats in the House of Representatives and the Senate.

It is clear that such a change cannot but be reflected in the US stock and financial markets, and many investors are interested in the consequences of the ongoing elections.

What will happen if the Republicans nevertheless come to power in the United States, how will this fact affect the country’s economy and what consequences can be expected for the stock market?

Active steps to end the military conflict in Ukraine

It’s no secret that the US Republican Party advocates reducing military assistance to Ukraine and ending the conflict as soon as possible.

That is, it can be assumed that after gaining control of Congress, the Republicans will not only cut aid funding, but also intensify actions aimed at concluding a truce.

Such steps could lead to a reduction in purchases from companies producing weapons, which in turn will lead to a drop in production volumes, and with them, profits. This fact will definitely cause a fall in the value of securities in this market segment on the stock exchange.  

Republican Area of ​​Interest

In recent years, the Republican Party has been actively financed by companies from the IT sector, so it is quite easy to predict that after coming to power, senators will begin to actively return the money invested in them.

This will be expressed in preferences for companies from the high-tech sector, perhaps a reduction in taxation in this area or additional subsidies for its development.

At the same time, economic programs actively financed by Democrats may be cut, the largest of which is support for “green” energy; at one time Biden promised to spend $2 trillion on “green” energy.

It will not be easy for the pharmaceutical companies that actively sponsored the Democrats in the 2020 presidential election; they are unlikely to be forgiven for actively supporting their competitors.

The situation as a whole

Most analysts predict a slowdown in inflation in the United States after the Republican Party's victory in the congressional elections.

And this will have a positive impact on the country’s economy as a whole and will have a positive impact on the exchange rate of the American dollar, further strengthening it in relation to the leading world currencies.   

We can only wait for the final election results and watch the first steps of the winning party.