Missed AI’s “Act 1”? Act 2 Could Be 16x Bigger. Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to our analysts, we’re only at the end of “Act 1″\u2014the R&D phase. “Act 2” is the global rollout. Continue \u00bb<\/a> <\/p>\n President Trump may soon be working with a divided government. Image source: Official White House Photo by Molly Riley. <\/p>\n President Trump vows to become “Mr. Veto” if Democrats win <\/p>\n President Donald Trump hasn’t been keen on the prospect of working with the opposition. In a recent Fox News interview, he proclaimed that “I guess I’ll become Mr. Veto” if a blue wave takes shape, and has previously gone on record as stating that he’d “veto everything” sent to him by a Democrat-led Congress. <\/p>\n On the one hand, the political gridlock that ensues from a divided Congress can, in some ways, be beneficial for the stock market. A split Congress effectively takes all major tax and spending legislation off the table, likely locking in historically low personal and corporate income tax rates through at least the end of Trump’s presidency in January 2029. Wall Street loves when things are predictable. <\/p>\n At the same time, a non-unified government can create friction points for the stock market. For example, a Democrat-controlled Congress could make debt-ceiling negotiations far more challenging. The debt ceiling is forecast to be reached in the first half of 2027. If Democrats take one or both houses of Congress, the odds of a lengthy government shutdown rise. <\/p>\n We’d likely also see friction between President Trump and Democrats over artificial intelligence (AI)<\/a> regulation. Whereas Trump favors as little regulation as possible for Wall Street’s and the U.S. economy’s No. 1 catalyst, most Democratic lawmakers prefer to limit data center expansion and impose tougher restrictions on AI solutions, including large language models. <\/p>\n Story Continues <\/p>\n Even if President Trump successfully vetoes AI legislation from a Democrat-controlled Congress, simply putting AI regulations in the spotlight could be bad news for stocks. <\/p>\n Image source: Getty Images. <\/p>\n A worst-case scenario is still a green light for investors <\/p>\n From a statistical standpoint, no political scenario is less desirable for investors than a Republican president overseeing a divided Congress. According to Retirement Researcher, the S&P 500’s average annual return over 34 years is just 7.33% under this scenario, compared to 14.01% to 16.63% under the other political scenarios. <\/p>\n While this might sound less than ideal, a little historical perspective changes everything. For instance, the S&P 500 has been higher at the six- and 12-month mark following every midterm election over the last 75 years, with November up 100% of the time! <\/p>\n Furthermore, a 7.33% average annual return, while notably lower than other political situations, is still markedly higher than the long-term annualized returns for real estate, commodities, and Treasury bonds. Even at their “worst,” stocks have continued to shine brightest for those willing to be patient. <\/p>\n Even if President Trump’s threats to “veto everything” perturb equities over the short term, history says that the Dow, S&P 500, and Nasdaq Composite are well-positioned for success, regardless of which political party is in power. <\/p>\n Should you buy stock in S&P 500 Index right now? <\/p>\n Before you buy stock in S&P 500 Index, consider this: <\/p>\n The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks<\/a> for investors to buy now\u2026 and S&P 500 Index wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. <\/p>\n Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $336,195!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,241,567!* <\/p>\n Now, it’s worth noting Stock Advisor’s total average return is 875% \u2014 a market-crushing outperformance compared to 208% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. <\/p>\n See the 10 stocks \u00bb<\/a> <\/p>\n *Stock Advisor returns as of November 3, 2026. <\/p>\n Sean Williams<\/a> has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy<\/a>. <\/p>\n<\/a> <\/p>\n
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