As the November midterm elections creep closer and U.S.-China tensions remain high, political uncertainty could rattle markets further.
On Monday, for instance, markets reacted swiftly to the conclusion of the Chinese Communist Party (CCP) congress, with Chinese stocks in Hong Kong opening at their lowest level since the 2008 financial crisis.
With that in mind, here are the top political stories this week with implications for investors:
Xi Jinping consolidates power in Communist China
Xi Jinping has secured a third five-year term as general secretary of the Chinese Communist Party (CCP), making him the most powerful Chinese leader in decades.
In both his remarks as well as amendments to his party's platform, Xi has signaled that he intends to tighten his grip on the world's second-largest economy by consolidating power economically, militarily, and technologically, analysts have suggested. And Xi, who is 69, has yet to indicate who might eventually succeed him as the next leader.
During the party meeting, the CCP voted to add an amendment to the constitution promising to "firmly oppose and contain Taiwanese independence," according to Bloomberg.
That is the strongest language Xi's CCP has used regarding Taiwan. It drew a swift rebuke from Taipei leaders, who are vowing not to be coerced by CCP officials should they try to deploy the economic tactics used in Hong Kong or follow through on military threats China issued in recent months, including during House Speaker Nancy Pelosi's (D-CA) visit to the island.
Just as there is strong bipartisan support for Ukraine in Washington, there also remains strong support for Taiwan. According to Defense News, Washington plans to double the amount of assistance to Taiwan's military to $10 billion during the next five years.
In a joint statement released earlier this month, Senate Foreign Relations Committee Chairman Robert Menendez (D-NJ) and the committee's top Republican Jack Risch (R-ID) underscored that support.