US Midterms: What Do They Mean for European Investors? – UBS Research

Key Takeaways

• 1.The base case for the November 3 US midterms is a split Congress (Republicans losing the House and narrowly keeping the Senate), with only a 10% chance of unified Republican control.
• 2.A renewed US-EU tariff confrontation is unlikely post-midterms due to the July 2026 trade deal capping tariffs at 15%; US focus will shift to pressing allies on China policy, prompting EU industrial policies like the Industrial Accelerator Act.
• 3.A divided Congress will not curb US deficits, which will maintain upward pressure on US and European bond yields; investors should favor high financial quality European equities and select IG/BB corporate bonds.

Table of Contents

• US midterms: What do they mean for European investors?
• Global asset class preferences definitions
• Risk Information
• Generic investment research – Risk information:

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