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Wall Street hopeful NYC favorite Mamdani would moderate

positions

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Governor races in Virginia, New Jersey also in focus

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Races could signal which party has momentum ahead of 2026

Congressional votes

By Lewis Krauskopf, Davide Barbuscia and Laura Matthews

NEW YORK, Nov 4 (Reuters) - Wall Street is on edge

heading into the New York City mayoral election on Tuesday, with

a potential victory for Zohran Mamdani set to reverberate

through the heart of global capitalism, where financiers worry

about the city's lasting competitiveness and appeal.

Investors also are watching the results of governors' races

in New Jersey and Virginia to gauge whether Democrats are

gaining momentum against President Donald Trump's Republican

Party ahead of next year's U.S. midterm elections.

Mamdani, a 34-year-old state lawmaker who won the Democratic

nomination, has been leading in polls and betting markets in a

fierce contest to run New York, the U.S. financial capital.

Wall Street and the finance industry have expressed broad

misgivings about the prospect of a Mamdani mayoralty, as the

democratic socialist pushes for higher taxes on corporations and

the wealthy. However, they are also hopeful that he moderates

his positions or finds roadblocks to achieving some of his aims.

A Mamdani win is "a risk I'm watching in 2026," said Dean

Lyulkin, CEO of Cardiff, a private investment firm and small

business lender in San Diego, California.

"Actual policy often turns out much more benign than

campaign rhetoric, but if other major cities follow this

pattern, markets may start pricing in more tax and regulatory

risks," Lyulkin said.

Mamdani's main opponent is Andrew Cuomo, the former

Democratic governor of New York state running as an independent,

with Republican nominee Curtis Sliwa third in most opinion

polls.

Mamdani has focused his campaign on affordability. His

agenda includes a rent freeze, free bus service, universal

childcare and city-run grocery stores. Mamdani's policies also

include hiking taxes on New York City's wealthiest and raising

the corporation tax, driving worries among the finance community

that the city's competitiveness will suffer.

While New York's mayor has no direct oversight over Wall Street,

the mayor sets the tone on whether the city is perceived as

business-friendly.

Some heavyweights in finance had poured money into efforts

to defeat Mamdani, including high-profile investors Bill Ackman

and Dan Loeb.

Still, some are optimistic about Cuomo's chances. Worries

tied to Mamdani's victory are "somewhat overexaggerated," said

Peter Cardillo, chief market economist at Spartan Capital

Securities in New York, who believes Cuomo may have a better

chance to win than polls indicate, while as mayor Mamdani would

face obstacles to implementing his proposals.

"Even if he should win, I don't think we're going to see the

drastic program that he is proposing go into effect," Cardillo

said.

Brian Gardner, chief Washington policy strategist at Stifel,

cautioned that there could be an overreaction to a Mamdani win

for implications for politics beyond New York.

"If he wins, a lot of ink will be spilled about the

Democratic Party's move left," Gardner said in a note. "However,

Mamdani seems likely to win with merely a plurality and has

benefited from the opposition's inability to coalesce around a

single credible candidate."

Wall Street also had its eyes on other races nationally,

including in Virginia and New Jersey, which could give an

indication of how voters are leaning ahead of next year's

midterm elections, which decide which party will control

Congress. The results could offer some insight into how

Americans are thinking about the ongoing U.S. government

shutdown and which political party is to blame.

If Republicans take a "big, big thumping," markets could see

some volatility, said Alex Morris, chief investment officer at

F/m Investments.

Still, a strong Democratic performance nationally on Tuesday

that indicates the party will do well in the midterms also could

be positive for some investors who prefer partisan "gridlock" in

Washington. As it stands, Republicans hold the presidency and

majorities in both the Senate and House of Representatives.

In Virginia, former U.S. Representative Abigail Spanberger,

a Democrat, faces Winsome Earle-Sears, the state's Republican

lieutenant governor. In New Jersey, Democratic U.S.

Representative Mikie Sherrill is pitted against Republican

businessman and former state lawmaker Jack Ciattarelli.

In another vote with implications for races next year, a

California ballot measure would lead to redrawing congressional

districts meant to help Democrats in the 2026 midterms.

"Both the Virginia and the New Jersey races will give us a

picture in time of how the electorate stands at the moment, and

that can let us make some kind of rough conclusions on the

midterms," said Chris Grisanti, chief market strategist at MAI

Capital Management in New York. "If it's a good night for the

Democrats, then you're thinking that they're going to be more

likely to take back the House next year."