• 

  42%

  +1.3%

  Policy Reset Rally

  Investors treat the Democratic sweep as a credible check on Trump’s tariff and Iran-war agenda. The rally extends as markets price lower inflation risk, fewer trade shocks, and a less open-ended Middle East conflict.

  Consumer Cyclicals +1.8% · Technology +1.2% · Industrials +0.9%

• 

  27%

  −0.7%

  Gridlock Reality Check

  The market reconsiders how much Democrats can change before the new Congress is seated and whether Trump will use vetoes and executive authority to preserve his agenda. The initial rally partially fades but does not become a crisis.

  Consumer Cyclicals −1.1% · Industrials −1.0% · Non-Energy Materials −0.5%

• 

  18%

  0.0%

  Rates Reprice Election

  The stock rally becomes a rates story as investors debate whether Democratic control lowers inflation by constraining tariffs or raises fiscal risk through budget standoffs. Sector leadership depends on the direction of the 10-year yield.

  Healthcare +0.5% · Consumer Cyclicals −0.5% · Utilities +0.3%

• 

  13%

  −0.2%

  Geopolitics Overrides Ballot

  Iran-war risk remains the main tail risk despite the Democratic sweep. A new Gulf incident or a clear de-escalation signal can quickly dominate the election narrative and move oil, volatility, and cyclical equities.

  Energy +0.8% · Industrials −0.6% · Finance +0.4%

Each figure is the modeled move of the S&P 500 if it happens. For information only. Not investment advice.