- Democrats are trying to prove their markets and economic track record ahead of the upcoming midterm elections.
- The White House has emphasized lower gasoline prices and its tough stance on China.
- Joe Biden is also considering banning imports of Russian metals as the war in Ukraine drags on.
President Joe Biden and the Democratic Party are battling to demonstrate their record on markets and the economy ahead of the midterm elections.
Voters will assess Biden’s performance on issues including soaring prices at the pump, trade relations with China and the economic impact of the war in Ukraine on Nov. 8.
Here are three market stories that will be top of mind for Democrats heading into the midterms:
Gas prices and OPEC+
Gas prices soared above $5 a gallon in June as Western sanctions on Russia cut crude oil supplies. They fell to $3.91 a gallon on Thursday, according to data from the American Automobile Association – but started to rise again for the first time in 99 days last month.
The White House has repeatedly pointed to lower prices at the pump, which has brought much-needed relief to American drivers at a time when inflation is at its peak.
—The White House (@WhiteHouse) August 11, 2022
Biden has pushed OPEC+ members to increase their crude production levels in a bid to keep gas prices low. But the cartel – which counts Russia and Saudi Arabia among its largest members – instead voted to cut production by around 2 million barrels a day.
That could push up pump prices on the East and South Coasts, as well as the Northeast and the Rockies, GasBuddy strategist Patrick DeHaan said last week.
China and semiconductors
Biden also cracked down on China ahead of midterms.
His administration last week introduced export controls that will limit sales of semiconductors made with American technology to companies with a special license.
Chinese chip stocks fell after the announcement – while US giants Nvidia and Advanced Micro Devices also fell more than 1% each.
The Philadelphia Semiconductor Index, which tracks the 30 largest U.S. chipmaker stocks, has fallen just under 44% this year, meaning it has significantly underperformed even the 25% loss suffered. by the benchmark S&P 500 index.
Biden’s export controls could fuel further sales, analysts have warned.
“It’s as if the market is implying that the past two years of semi-growth are a mirage, engineered by central banks, and need to be erased,” Bank of America said in a research note this week.
Russian metal sanctions
The next major policy move by Democrats could be to impose new sanctions on Russia – as Biden seeks to show he is cracking down on Moscow.
The Biden administration is considering restricting imports of Russian aluminum, Reuters reported on Wednesday, citing sources familiar with the matter.
Having already banned imports of Russian oil and gas, this policy would seek to stifle another potential source of revenue for Russia and Vladimir Putin.
Aluminum prices rose 5.8% to $2,330 an ounce after Reuters reported the potential import ban, while the Dow Jones Aluminum Index climbed 7%.
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