- \n
- A split Congress would make major new laws harder to pass<\/b>, but the White House could rely more heavily on tariffs, regulators and executive orders.<\/li>\n<\/ul>\n
- \n
- Investment Takeaway: <\/i><\/b>That could create opportunities for <\/i>banks <\/i><\/b>and some <\/i>energy companies<\/i><\/b>, while increasing <\/i>uncertainty for retailers, technology firms<\/i><\/b> and other businesses exposed to tariffs or government pressure.<\/i><\/li>\n<\/ul>\n
- \n
- Healthcare could be one of the clearer winners.<\/b> Democratic control of at least one chamber could make further Medicaid cuts harder to pass.<\/li>\n<\/ul>\n
- \n
- Investment Takeaway:<\/i><\/b> That may help <\/i>hospitals <\/i><\/b>by preserving patient coverage and reducing unpaid bills. <\/i>Medicaid-focused insurers, large pharmaceutical companies, biotech and health-tech stocks could also benefit from lower policy risk.<\/i><\/b> Medicare Advantage is more complicated because regulators can still change payments without congressional approval.<\/i><\/li>\n<\/ul>\n
- \n
- Banks may not need a Republican Congress to benefit.<\/b> Republican control would make financial deregulation easier, but the Fed and other banking regulators can already rewrite capital, stress-testing and supervision rules.<\/li>\n<\/ul>\n
- \n
- Investment Takeaway:<\/i><\/b> That means <\/i>large banks and regional lenders<\/i><\/b> could still receive regulatory relief under gridlock. The trade-off is greater scrutiny if a Democratic House launches hearings or investigations into the industry.<\/i><\/li>\n<\/ul>\n
- \n
- Energy is not a simple red-versus-blue trade.<\/b> Republican control could support drilling, pipelines, LNG and nuclear power.<\/li>\n<\/ul>\n
- \n
- Investment Takeaway<\/i><\/b>:<\/b> But oil companies and refiners would remain sensitive to White House decisions on Iran, Venezuela, sanctions and domestic production. Oil producers and refiners could therefore face considerable policy and geopolitical volatility even under a market-friendly election result.<\/i><\/li>\n<\/ul>\n
- \n
- The AI trade could split in two.<\/b> Overall AI investment is unlikely to be derailed, while major federal AI legislation looks difficult to pass.<\/li>\n<\/ul>\n
- \n
- Investment Takeaway<\/i><\/b>:<\/b> That remains supportive for <\/i>chips, software<\/i><\/b> and <\/i>cloud demand<\/i><\/b>. The <\/i>physical datacentre buildout faces more risk:<\/i><\/b> states and local authorities are considering construction restrictions and rules that would make datacentres pay more towards electricity and grid upgrades. AI demand can remain strong even if building new capacity becomes harder or more expensive.<\/i><\/li>\n<\/ul>\n
- \n
- Defence has bipartisan support but funding could arrive more slowly.<\/b> Around $350 billion of the proposed $1.5 trillion fiscal 2027 defence budget depends on separate legislation.<\/li>\n<\/ul>\n
- \n
- Investment Takeaway:<\/i><\/b> If Democrats win either chamber, funding for drones, munitions, missile defence and military AI could be delayed or reduced. Overall defence spending is unlikely to collapse, but investors should not assume every part of the headline budget will become a contract immediately.<\/i><\/li>\n<\/ul>\n
- \n
- Crypto has more riding on the result. <\/b>Republican control would improve the chances of legislation clearly dividing oversight between the SEC and CFTC.<\/li>\n<\/ul>\n
- \n
- Investment Takeaway:<\/i><\/b> This would be<\/i> a potential positive for Coinbase, Robinhood and other crypto platforms.<\/i><\/b> Democratic control on the other hand would probably bring more focus on consumer protection, illicit finance and political scrutiny. Regulators could still introduce rules, but these would be less permanent than legislation and easier for a future administration to reverse.<\/i><\/li>\n<\/ul>\n
- \n
- Infrastructure looks resilient<\/b>. Both parties support spending on roads, bridges and other essential projects.<\/li>\n<\/ul>\n
- \n
- Investment Takeaway:<\/i><\/b> Republicans would likely prioritise highways, faster permits and greater state control. Democrats would push more money towards public transport, rail and climate resilience. The election may change where infrastructure money goes rather than whether it is spent.<\/i><\/li>\n<\/ul>\n
- \n
- Election relief may not last forever.<\/b> Volatility has historically risen before midterms and fallen once the result is known. But a divided Congress could produce government shutdowns or a debt-ceiling battle in 2027.<\/li>\n<\/ul>\n
- \n
- Investment Takeaway:<\/i><\/b> Split government has historically been linked with <\/i>smaller deficits, which could eventually help bonds<\/i><\/b>, although the political route there may be messy.<\/i><\/li>\n<\/ul>\n
Overall, healthcare<\/b>, tech\/AI<\/b>, and infrastructure<\/b> offer relatively balanced exposure. Banks<\/b> could benefit even under gridlock, while energy<\/b>, defence<\/b>, crypto<\/b> and datacentres<\/b> require more careful stock selection.<\/p>\n
The Euro Is Losing Ground to the US Rate Advantage\u00a0<\/b><\/p>\n
The euro is coming under increasing pressure. One key driver is the widening yield spread between 10-year US Treasuries and German government bonds. It has now exceeded 1.8 percentage points, up from 1.4 percentage points at the beginning of September.<\/p>\n
When yields on 10-year US Treasuries rise significantly faster than those of their German counterparts, US dollar-denominated investments become more attractive. Large global investors such as pension funds and sovereign wealth funds could therefore withdraw capital from the euro area and shift it into higher-yielding US Treasuries. This strengthens the US dollar and puts additional pressure on the EUR\/USD exchange rate.<\/p>\n
The widening rate spread primarily reflects different expectations for monetary policy. In the US, inflation concerns, higher energy costs and a resilient economy are driving yields higher. The market therefore expects the Federal Reserve to keep interest rates higher for longer or even raise them further.<\/p>\n
The euro-area economy, by contrast, is weaker. As a result, the market expects a less aggressive ECB, which is limiting German yields relative to US yields.<\/p>\n
Additional pressure is coming from France. Political and fiscal uncertainty is weighing on confidence in European assets and acting as an accelerant for the euro\u2019s decline. The US rate advantage provides the fundamental basis, while the crisis in France is exacerbating the depreciation of the common currency.<\/p>\n
EUR\/USD at Its Lowest Level Since May 2025\u00a0<\/b><\/p>\n
EUR\/USD fell 1.3% last week to 1.1243, marking its fourth consecutive weekly loss. The currency pair has fallen around 4% from its August high and is trading at its lowest level since May 2025.<\/p>\n
This confirmed the downtrend (see the structure shown on the chart). On the downside, the low at 1.1065 is the next potential target. A move back above the breakout level at 1.1324, by contrast, could pave the way for a recovery toward the 20-week moving average at 1.1507.<\/p>\n
Only a rise above this level would shift momentum back in favor of buyers. Until then, EUR\/USD remains vulnerable to further declines.<\/p>\n
![\"\"](\"https:\/\/www.etoro.com\/wp-content\/uploads\/2026\/10\/Lale-blog-image-1.png\")
<\/p>\nEURUSD, weekly chart. Source: etoro<\/p>\n
Delta Ahead of Earnings – How Resilient Is US Travel Demand?\u00a0<\/b><\/p>\n
Delta Air Lines will report its quarterly results on Friday. The report is considered an important economic barometer. It will show whether US consumers remain willing to spend heavily on premium flights despite high inflation, geopolitical risks and volatile energy prices.<\/p>\n
Travel demand, ticket prices and fuel costs will be key. Particularly important will be how much fluctuating oil and jet fuel prices weigh on margins and whether Delta can pass higher costs on to customers.<\/p>\n
Delta Stock: Nervousness Is Showing\u00a0<\/b><\/p>\n
The stock closed around 1% lower last week at $84.07, slipping back below its 20-week moving average. That reflects the nervousness ahead of the earnings report.<\/p>\n
Support around $77 held several times in September, triggering a subsequent recovery. This leaves some room for further short-term pullbacks. Whether the recovery will continue and the stock can test its all-time high soon could be decided this week.<\/p>\n
The stock is currently 12% below its all-time high, compared with more than 20% just a few weeks ago. A break below $77 would put the uptrend at risk. That would open the way toward $68. The long-term uptrend remains intact for now, however.<\/p>\n
![\"\"](\"https:\/\/www.etoro.com\/wp-content\/uploads\/2026\/10\/lale-blog-image-2-1.png\")
<\/p>\nDelta Air Lines, weekly chart. Source: etoro<\/p>\n
October puts market conviction to the test<\/b><\/p>\n
Bitcoin begins October trading near $85,000, with a recovery that is losing support from institutional flows. ETFs closed the week with inflows slightly above $100 million, compared with almost $2.386 billion the previous week. Flows remain positive, but the slowdown matters for a market that needs fresh demand to sustain its advance.<\/p>\n
On-chain analysis<\/b> reinforces caution. The price recovery coexists with weak demand and active selling pressure, limiting the continuation of the upward move in the short term. The $89,000 area will be an important test of the market\u2019s ability to absorb selling without losing momentum.<\/p>\n
In derivatives<\/b>, the forced closure of short positions drove part of the recent rise, while the subsequent reduction in open interest and subdued funding rates left the market less heavily leveraged. That improvement, together with the lower risk of an immediate rate hike, supports the recovery, although its continuation will depend on spot buying in an environment where elevated bond yields continue to exert pressure.<\/p>\n
The $87,000\u2013$87,500 area is the next test. Moving above it with sustained closes, higher spot volume and several sessions of recovering ETF flows would strengthen the case for an advance towards $89,000\u2013$90,000. A breakout without those confirmations would be less convincing.<\/p>\n
If demand does not regain strength, consolidation would remain the most likely scenario, with potential pullbacks towards the $80,000\u2013$82,000 area. A sustained break below $80,000, accompanied by ETF outflows, would weaken the recovery scenario.<\/p>\n
For Ethereum<\/b>, recent ETF outflows reduce support for the recovery, while the divergence among altcoins requires each asset to be assessed individually. A network\u2019s growth or its involvement in tokenisation and AI agents can strengthen its activity, but its investment appeal depends on how much value accrues to the token and what its price already reflects.<\/p>\n
The recovery scenario remains open, although short-term caution is warranted until the price advance is once again supported by spot buying and sustained institutional inflows. That combination would give the move greater conviction and improve the market\u2019s ability to absorb profit-taking.<\/p>\n
![\"\"](\"https:\/\/www.etoro.com\/wp-content\/uploads\/2026\/10\/Lale-blog-image-3.png\")
<\/p>\n![\"\"](\"https:\/\/www.etoro.com\/wp-content\/uploads\/2026\/10\/Lale-blog-image-4.png\")
<\/p>\n<\/p>\n
This communication is for information and education purposes only and should not be taken as investment advice, a personal recommendation, or an offer of, or solicitation to buy or sell, any financial instruments. This material has been prepared without taking into account any particular recipient\u2019s investment objectives or financial situation and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Any references to past or future performance of a financial instrument, index or a packaged investment product are not, and should not be taken as, a reliable indicator of future results. eToro makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication.<\/i><\/b><\/h6>\n","protected":false},"excerpt":{"rendered":"
Analyst Weekly, October 5, 2026 For investors, the midterms look less like a market-wide turning point and more like a reshuffling of sector winners and losers. Democrats look likely to take the House, while the Senate remains a closer call, making gridlock the leading scenario. But gridlock does not put Washington on mute: tariffs, regulation…<\/p>\n","protected":false},"author":144,"featured_media":1206309,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1311],"tags":[],"asset_type":[],"class_list":["post-1294116","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-market-insights"],"acf":[],"yoast_head":"
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- Investment Takeaway:<\/i><\/b> Split government has historically been linked with <\/i>smaller deficits, which could eventually help bonds<\/i><\/b>, although the political route there may be messy.<\/i><\/li>\n<\/ul>\n
- Election relief may not last forever.<\/b> Volatility has historically risen before midterms and fallen once the result is known. But a divided Congress could produce government shutdowns or a debt-ceiling battle in 2027.<\/li>\n<\/ul>\n
- Investment Takeaway:<\/i><\/b> Republicans would likely prioritise highways, faster permits and greater state control. Democrats would push more money towards public transport, rail and climate resilience. The election may change where infrastructure money goes rather than whether it is spent.<\/i><\/li>\n<\/ul>\n
- Infrastructure looks resilient<\/b>. Both parties support spending on roads, bridges and other essential projects.<\/li>\n<\/ul>\n
- Investment Takeaway:<\/i><\/b> This would be<\/i> a potential positive for Coinbase, Robinhood and other crypto platforms.<\/i><\/b> Democratic control on the other hand would probably bring more focus on consumer protection, illicit finance and political scrutiny. Regulators could still introduce rules, but these would be less permanent than legislation and easier for a future administration to reverse.<\/i><\/li>\n<\/ul>\n
- Crypto has more riding on the result. <\/b>Republican control would improve the chances of legislation clearly dividing oversight between the SEC and CFTC.<\/li>\n<\/ul>\n
- Investment Takeaway:<\/i><\/b> If Democrats win either chamber, funding for drones, munitions, missile defence and military AI could be delayed or reduced. Overall defence spending is unlikely to collapse, but investors should not assume every part of the headline budget will become a contract immediately.<\/i><\/li>\n<\/ul>\n
- Defence has bipartisan support but funding could arrive more slowly.<\/b> Around $350 billion of the proposed $1.5 trillion fiscal 2027 defence budget depends on separate legislation.<\/li>\n<\/ul>\n
- Investment Takeaway<\/i><\/b>:<\/b> That remains supportive for <\/i>chips, software<\/i><\/b> and <\/i>cloud demand<\/i><\/b>. The <\/i>physical datacentre buildout faces more risk:<\/i><\/b> states and local authorities are considering construction restrictions and rules that would make datacentres pay more towards electricity and grid upgrades. AI demand can remain strong even if building new capacity becomes harder or more expensive.<\/i><\/li>\n<\/ul>\n
- The AI trade could split in two.<\/b> Overall AI investment is unlikely to be derailed, while major federal AI legislation looks difficult to pass.<\/li>\n<\/ul>\n
- Investment Takeaway<\/i><\/b>:<\/b> But oil companies and refiners would remain sensitive to White House decisions on Iran, Venezuela, sanctions and domestic production. Oil producers and refiners could therefore face considerable policy and geopolitical volatility even under a market-friendly election result.<\/i><\/li>\n<\/ul>\n
- Energy is not a simple red-versus-blue trade.<\/b> Republican control could support drilling, pipelines, LNG and nuclear power.<\/li>\n<\/ul>\n
- Investment Takeaway:<\/i><\/b> That means <\/i>large banks and regional lenders<\/i><\/b> could still receive regulatory relief under gridlock. The trade-off is greater scrutiny if a Democratic House launches hearings or investigations into the industry.<\/i><\/li>\n<\/ul>\n
- Banks may not need a Republican Congress to benefit.<\/b> Republican control would make financial deregulation easier, but the Fed and other banking regulators can already rewrite capital, stress-testing and supervision rules.<\/li>\n<\/ul>\n
- Investment Takeaway:<\/i><\/b> That may help <\/i>hospitals <\/i><\/b>by preserving patient coverage and reducing unpaid bills. <\/i>Medicaid-focused insurers, large pharmaceutical companies, biotech and health-tech stocks could also benefit from lower policy risk.<\/i><\/b> Medicare Advantage is more complicated because regulators can still change payments without congressional approval.<\/i><\/li>\n<\/ul>\n
- Healthcare could be one of the clearer winners.<\/b> Democratic control of at least one chamber could make further Medicaid cuts harder to pass.<\/li>\n<\/ul>\n
- Investment Takeaway: <\/i><\/b>That could create opportunities for <\/i>banks <\/i><\/b>and some <\/i>energy companies<\/i><\/b>, while increasing <\/i>uncertainty for retailers, technology firms<\/i><\/b> and other businesses exposed to tariffs or government pressure.<\/i><\/li>\n<\/ul>\n