BofA: If Republicans Lose Senate in Midterms, US Stocks Could Fall Over 10%; Texas Race to Decide 'AI Policy'

BofA strategist Hartnett warns that market pricing for the midterm elections is overly optimistic. If Democrats win the Senate and Republicans lose in Texas, US stocks could fall more than 10% by year-end. The Texas race is seen as a "referendum" on AI infrastructure policy; if the outcome reverses, policy expectations for both deregulation trades and AI capital expenditure would come under pressure simultaneously.