TLDR
- Darius Dale, CEO of 42 Macro, warned investors about a possible long bear market tied to the 2028 election.
- Democrats won both chambers of Congress on November 3, which Dale sees as an early political signal.
- He pointed to the 1930s, when the S&P 500’s predecessor fell about 83% between April 1930 and June 1932.
- Dale thinks US stocks could peak in late 2027 or early 2028.
- Other Wall Street firms are more upbeat, and stocks have often done well under divided government.
Darius Dale, founder and CEO of research firm 42 Macro, has warned that investors may be underestimating the risk of a long bear market. He linked his concern to the 2028 US presidential election. His comments came in a post on X.
Democrats won control of both chambers of Congress in the November 3 elections. The result was a setback for President Donald Trump’s administration. Dale sees the vote as a possible early sign of where US politics is heading.
Questions have been raised about public frustration with economic inequality, living costs and corporate power. Some wonder if that frustration could lead to tougher economic policies after 2028. Dale’s warning is built on that idea.
What Dale Said About the 1930s
Dale compared the current moment with the Great Depression. He argued that investors could face large losses if they assume another long downturn is not possible. He also said the buy-and-hold approach could put families at risk over the next decade.
He pointed to President Franklin D. Roosevelt’s New Deal, which brought sweeping economic changes in the 1930s. Dale’s central worry is that US politics may be moving toward policies that spread wealth more widely. He also fears tighter limits on corporate profits.
Data from Yardeni Research shows how deep the losses were in that era. The S&P 500’s predecessor index fell about 83% between April 1930 and June 1932. The drop from the 1929 peak was even larger.
Another downturn came in 1937. US stocks lost about 54.5% through March 1938.
The record does not place the blame only on the New Deal. The first market crash came before Roosevelt took office. Bank failures, falling prices, monetary policy errors and weak economic activity also played a part.
Dale’s Market Timing and AI Concerns
Dale has also questioned how long the current market cycle can last. He has said US stocks could peak in the second half of 2027 or the first half of 2028.
One concern is the huge spending on artificial intelligence infrastructure. Higher taxes, tighter rules and limits on data centre building could lower expected profits for big technology firms. Those firms make up a large share of the S&P 500’s total value.
Dale’s view is not shared by several large Wall Street institutions. They have given a more positive outlook for stocks. Their view fits with past trends.
US stocks have often done well under divided government. Gridlock in Congress can limit big changes to the law. Political uncertainty has also not always led to falling prices.
Corporate earnings, economic growth, interest rates and market liquidity usually have a more direct effect on stock performance. A long bear market is also different from short-term swings around an election. Investors who leave diversified portfolios because of political forecasts can miss later recoveries.
Dale’s warning is focused on managing downside risk. He has said investors should not assume past gains will continue forever. The 2028 election is still two years away, and no market collapse has been reported.
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