Rising bond yields, midterm elections to test US stock rally prospects

The fourth quarter typically sees US stocks perform well, but investors now contend with rising bond yields and heavy dependence on artificial intelligence spending. The corporate earnings season and November midterm elections are expected to increase market volatility as the year concludes.

Analysts project significant earnings growth, particularly from AI infrastructure investments, which could influence market direction in the final quarter. However, the combination of bond market pressures and political uncertainty presents challenges to the traditional seasonal strength of equities.