It’s official. We’ve now beaten the Great Tech Momentum Unwind of the dot-com bust. Truly incredible.

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And its showing no signs of stopping.

Both crushed expectations (AAPL revenue/EPS beat on strong iPhone; PLTR 96% rev growth + commercial surge past gov’t, guidance raised). Stocks still dropped on forward worries: AAPL guided lower holiday margins (memory costs) + slower services; PLTR’s sky-high valuation left little room for anything short of perfection amid broader AI/tech pressure. Classic sell-the-news.

What’s happening now in the stock market is more than just a “correction in tech stocks.”

Sure, AI CapEx concerns are legitimate and investors will always care about profitability.

But, there’s more beneath the surface here.

The reality is that the market is pricing-in a major shift in the political landscape of the US.

Over the last 12 months, market expectations for a Democrat “sweep” of the US Midterm elections have tripled.

Over the last 45 days alone, these expectations are up +30 percentage points.

As it stands, markets themselves now see a near-80% chance of a Democrat “sweep” of the US Midterm elections.

President Trump has already vowed to become “Mr. Veto” if this in fact does happen.

This is post is not political, it’s objective. A change in the political landscape always comes with uncertainty; markets hate uncertainty.

Objectively, the market is in the process of pricing-in two years of political gridlock.

Could this change? Of course. But markets price-in the most probable outcome, and the odds now overwhelmingly favor the aforementioned scenario.

Tomorrow sets the stage for the next two years.

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