Is President Trump’s 1929-style crash prediction unfolding?

After warning ahead of the Midterms that an election win for the Democratic Party could lead to ‘a 1929-style economic depression’, President Donald Trump took an apparent victory lap on Truth Social amidst the Thursday, November 5, stock market bloodbath.

Specifically, the commander-in-chief made two similar posts, claiming that the equity crash was due to the ‘blue wave’, calling the session ‘one of the Worst Days in History’ and describing it as ‘a sad thing to watch.’

Trump also expressed grief, claiming that ‘it took so much work to get us to a level that no one has ever seen before’, referencing the recent record highs for major indices such as the S&P 500 and the Dow Jones Industrial Average (DJIA).

He also reminded his followers that the drop is affecting people’s 401(k)s.

On Thursday, the S&P 500 fell 4.36%, the DJIA declined 3.44%, and the tech-heavy Nasdaq-100 plummeted 6.36%.

Finally, the latter of the two posts was shorter, and in it, President Trump said that ‘you only have yourselves to blame’, though it remained somewhat unclear if he directed the criticism at the citizens or at the Democratic Party, with the former appearing more likely.

Would a stock market crash have happened regardless of Midterms?

Elsewhere, though the Thursday bloodbath appears to be the beginning of the fulfillment of the billionaire Republican’s pre-election prediction that ‘if the Democrats win, you will have a 1929-style economic depression’, multiple experts estimated that a crash is likely no matter who controls Congress.

Specifically, 2026 featured a narrative shift in relation to the artificial intelligence (AI) ‘boom’ with an increasing number of analysts conceding that AI has become a ‘bubble’. 

Speaking on Monday, November 2, professor and economist Steve Hanke warned that there was an approximately 40% chance of a Dot-com-like crash taking place, wiping roughly 40% from the overall market, and as much as 70% from big tech due to the accumulation problems in the economy.

Ed Yardeni, meanwhile, determined in October that an AI bubble has indeed formed based on a series of indicators, though he simultaneously stated that signs indicating an imminent bust remain few. 

Big tech stocks already bucking in October

Furthermore, last week showed other signs of danger, with Google’s (NASDAQ: GOOGL) earnings report triggering a 12% daily plunge, and Intel’s (NASDAQ: INTC) disappointing guidance leading to a 28% collapse for the equity.

Mid-October also gave additional signs that the AI sector is under pressure due to its voracious cash burn and lacking revenue, as the yield on corporate debt of CoreWeave (NASDAQ: CRWV) – an important and troubled neocloud – ticked past 15%.

Finally, investigations dating back to early 2026 have shown that, at the very least, Microsoft (NASDAQ: MSFT) and Amazon (NASDAQ: AMZN) purchased more GPUs than they can use. 

Considering the high cost of such hardware and its comparatively short shelf life, the alleged overbuying casts doubt on the wisdom behind the capital expenditure (CapEx) of the two hyperscalers and implies a risk that Nvidia (NASDAQ: NVDA) will struggle to keep growing its revenue in 2027.

Why the ‘blue wave’ likely triggered the Thursday stock crash

Meanwhile, despite years of evidence that AI-related expenditures came with substantial risks, the Democratic victory in the midterm elections cannot be entirely disregarded as one of the causes of the Thursday stock market crash.

The party has generally been urging tighter regulation of big tech, and grassroots opposition to artificial intelligence data centers appears more likely to find a friendly institutional ear. 

Furthermore, some of the most prominent names in big tech, such as Elon Musk, are facing a risk of an investigation over involvement with President Donald Trump’s administration.

Overall, such a change in the political landscape has the potential to slow down the AI ‘boom’ significantly when a change of pace is widely seen as intolerable for big tech.

So far, despite undeniable technological advancement, the artificial intelligence sector has benefitted from the ability to move fast with its vast expansion and expenditure, despite most of the biggest promised breakthroughs continuously existing both in the future and on a perpetually shifting timetable. 

Additionally, frontier AI labs have been permitted to engage in different types of dubious activities, including allowing their models to hack other firms and national governments due to insufficient guardrails, and, allegedly, to engage in rapacious piracy to secure training data.

Under the circumstances, a slowdown and closer government scrutiny could have a severe adverse impact on the sector.

Is the real Recession danger coming from the White House?

Lastly, the political risks for the stock market are also coming from the White House in the wake of the Midterms. President Donald Trump has indicated that, facing a blue Congress, he would become ‘Mr. Veto’, potentially hammering the U.S.’ ability to govern itself.

Simultaneously, the commander-in-chief might engage in additional risky geopolitical behavior, bereft of concern over how his party might perform in any imminent elections and without the ability to run for the highest office in the country in 2028.

The somewhat erratic pattern of both claiming negotiations with Iran and threatening an escalation against the Islamic Republic highlights the potential risk of further turmoil.

Tehran seemingly engaging in kindred double-talk has only served to increase anxiety.

Featured image via Shutterstock