The Midterms Could Trigger A 10% Market Crash: Here’s How To Hedge It

Hedging the Midterms

The market is pricing a benign midterm outcome. Hartnett sees a very different tail risk.

A Democratic Senate, particularly if combined with a Republican loss in Texas and a political backlash against the AI buildout, could challenge two of the market’s strongest assumptions: deregulation and an AI-friendly policy backdrop. Hartnett sees that tail scenario driving a >10% equity correction into year-end.