A Carson Investment Research strategist says the midterm elections produced a "blue tsunami" that marks the "beginning of the end" of the Trump era. And here's the twist: that's supposedly good news for your portfolio.

The 'Blue Tsunami'

Barry Gilbert, VP and Asset Allocation Strategist at Carson Investment Research, wrote in a Nov. 4 newsletter that Americans have "resoundingly rejected how President Trump has governed in the first two years of his second term."

Gilbert described the results as a "blue tsunami," noting Democrats are projected to secure a 56-44 majority in the Senate and a 259-176 majority in the House.

With Congress flipping, Gilbert expects less cooperation and more friction. Lawmakers will try to "thwart his agenda through greater oversight," he wrote. But Trump is "still president," which gives him wide latitude on foreign policy, tariffs, and executive orders.

And he's been busy on that front. Gilbert highlighted that Trump has averaged 166 executive orders per year in his second term, which he noted is "a faster pace than any president since FDR."

Market Reaction and Spending

Despite the political realignment, Gilbert sees the results as positive for equities. "Divided government isn't likely to slow down the spend, and in the near term that's good for markets," he wrote.

He pointed to a wild overnight session: Nasdaq futures were initially down near 2% but rose over 2% by morning. According to Gilbert, "Markets are largely indifferent to the federal government's party configuration."

'Beginning of the End'

Gilbert called this period the "beginning of the end," explicitly referring to Trump as a "lame duck president" in his final two years. But he cautioned that Trump "is not one to fade into the background."

As for why Democrats won, Gilbert said voters saw them as the "best option to control inflation, focus on American prosperity, and strengthen the middle class." He warned that if Democrats forget that lesson, "the political gains won't last long."

How Has the Stock Market Performed?

The S&P 500 index has advanced 10.36% year-to-date. The Nasdaq Composite index was up 9.19%, and the Dow Jones gained 7.04% YTD.

On Wednesday, the SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust ETF (QQQ), which track the S&P 500 and Nasdaq-100 respectively, closed higher. SPY rose 1.65% to $766.81, while QQQ advanced 0.97% to $691.95. Meanwhile, the Dow tracker, State Street SPDR Dow Jones Industrial Average ETF Trust (DIA), ended 3.10% higher at $533.11.

In premarket trading on Thursday, SPY was up 0.10%, QQQ declined 0.78%, and DIA rose 0.70%.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by MarketDash editors.