Trump's efforts in the U.S. midterm elections trigger policy uncertainty, and the US stock market faces unresolved policy risks

On January 14, Ned Davis Research’s Chief U.S. Strategist Ed Clissold intended to create a new term—Big MAC trading, an acronym for “Big Midterms Are Coming.” He aims to use this concept to summarize the core theme of the U.S. stock market in 2026: the policy directions and their impacts surrounding the upcoming fall congressional elections. At the beginning of the year, U.S. President Trump issued a series of policy-like statements, indicating that he is focusing on boosting the Republican Party’s chances in the November elections, with policy efforts targeting the hotly debated issue of American “livelihood affordability.” This trend could have far-reaching effects on the stock market. For example, last week’s market performance saw Trump demand credit card issuers set interest rate caps at 10%—less than half the current average rate, causing bank stocks to plummet; he ordered defense companies to suspend dividend payments and reinvest funds into production, which also led to a sharp decline in the defense sector; and after the government recently criticized the Federal Reserve’s independence, Wall Street was in panic on Monday. In his report, Clissold wrote: “Before the midterms, policy adjustments targeting specific industries will become a major risk,” and currently, the market is unsure how to hedge against such risks. (Jin10)