WS #16809

The dominant market narrative has shifted sharply from geopolitical risk to US political realignment following the 'blue tsunami' of Democrats taking control of both the House and Senate. This legislative shift triggered an initial selloff driven by fears of stalled AI/tech deregulation and higher taxes, but Asian markets staged a significant relief rally as investors concluded the worst-case scenarios were overdone. Concurrently, the Middle East situation remains in escalation mode with Iranian strikes on Hormuz infrastructure and US retaliatory strikes, though the new Congress is signaling a diplomatic pivot away from conflict. In the corporate sector, Novo Nordisk (NVO) delivered a standout earnings beat, raising full-year guidance on strong Wegovy pill sales, which serves as a critical counter-signal to broader healthcare weakness. In the energy space, escalating Iran-Israel tensions are creating a bifurcated market: energy majors (XOM, CVX) and refiners are benefiting from supply disruption risks, while airlines and shipping face headwinds. Meanwhile, AMD’s after-hours jump suggests that despite the macro political noise, high-quality semiconductor demand remains robust, offering a niche bullish signal within the tech sector.