Until quite recently, the AI boom had been viewed in an almost entirely positive light. But for all of the promise, fears are now growing that AI could also disrupt sectors, hurt workers, and pose a risk to the economy.

U.S. equity markets are at record levels, supported by resilient corporate earnings and investors looking past geopolitical risks in the Middle East. However, a widening gap is emerging between asset prices and underlying economic conditions.

The U.S. midterm election in November is shaping up to be a referendum on Trump 2.0. We examine historical equity market performance surrounding midterm elections, and what this might be—or might not be—suggesting for this year and next.