US midterms 2026: How gold, oil, US dollar and AI stocks could react

Vijay Valecha, Thu, Nov 5, 2026 Khaleej Times

Analysts say a Democratic Congress limits Trump’s fiscal agenda, but rates, inflation, jobs data and Iran will steer gold, oil, the dollar and AI stocks

Markets will take their cues from interest rates, inflation, jobs data and Iran, not from Congress alone, analysts told Khaleej Times, even though Democrats now control both the House and the Senate after the US midterm elections.

The result sets up divided government for the final two years of President Donald Trump’s term and makes large tax and spending changes harder to pass

Gold shows the clearest reaction, though analysts differ on how far it will run.

On Thursday morning it traded at $4,138 an ounce, up 5.2 per cent, after slipping below $4,000 recently.

Vijay Valecha, Chief Investment Officer at Century Financial, called the result a positive trigger rather than a decisive win.

Gold remains below its level of a month ago, markets still price a strong chance of a Federal Reserve rate rise in December, and speculators trimmed their bets through October. A hold above $4,000 after this week’s jobs and inflation data would signal a lasting recovery, he said. Until then, he is neutral to mildly positive.

All three analysts see the physical market, not the ballot box, driving crude.

Valecha said Brent has fallen over the past week as Qatar-led talks raised hopes of reopening the Strait of Hormuz. Continuing attacks on ships limit the downside, he said, and oil is likely to stay volatile, easing while talks progress but with sharp upside risk if they fail.

Dweik noted that US crude output is already close to record levels, so the question is whether the election changes expectations for future supply. A Democratic Congress could slow parts of the deregulation agenda, limiting another surge in production. Tougher congressional pressure on Iranian sanctions could remove barrels from the market and benefit major Gulf producers. In the near term, though, geopolitics remains the stronger driver, as sharp price moves on US-Iran deal expectations have shown.

Valecha is neutral on the dollar. Other major central banks are also signalling possible rate rises, he said, so US jobs and inflation figures will matter more than Congress.

Borges called the implications ambiguous. Stronger institutional checks could support confidence in US assets, while lower yields could pull the other way. The currency’s response will depend more on the growth and Fed backdrop than on Congress, he said.

Valecha stays bullish, though he expects gains to be selective. He pointed to Vertiv raising its annual sales outlook, Arista posting its fastest revenue growth since listing and AMD’s data-centre sales nearly doubling. The main risks, he said, are tougher checks on data-centre permits and power use, especially after Democratic governor wins in states such as Texas and Georgia.

Khaleej Times