Markets
Democrats Win Congress as Asian Shares Split and Nasdaq Futures Pare Steep Early Losses
Image: 6493990 via Pixabay
Divided government is the base case for markets, with US index futures recovering from deep overnight declines before the open.
By Emma Cruz ·
Democrats won majorities in both the US House and Senate in Tuesday's midterm elections, and global markets reacted unevenly overnight. The Associated Press described the result as a decisive rebuke of Republican governance and said it points to a new era of congressional resistance to President Donald Trump [1]. Futures tied to US stock indexes swung sharply lower on the first results, then recovered much of the ground by early Wednesday in New York.
According to Reuters, Nasdaq-100 futures fell as much as 2.4% and S&P 500 futures as much as 1.4% in early trading. By 3:13 a.m. ET, Dow E-mini futures were up 237 points, or 0.46%, S&P 500 E-minis were up 0.15% and Nasdaq-100 E-minis were up 0.26% [2]. The rebound suggests investors had largely priced in a Democratic win. Reuters had reported hours earlier that futures were lower while traders waited for results, with S&P 500 contracts down 0.5% and Nasdaq contracts down 0.9% [3].
Asian equities were mixed in Wednesday trading, the AP reported. Japan's Nikkei 225 fell 1.4% to 62,188.63, while South Korea's Kospi rose 0.6% to 5,683.80. Hong Kong's Hang Seng gained 1.1% to 23,791.61 and the Shanghai Composite climbed 2.2% to 3,686.17. Australia's S&P/ASX 200 slipped 0.6% to 8,834.50 after the Reserve Bank of Australia raised interest rates on Tuesday [1].
Outside equities, the AP reported that Brent crude rose 0.2% to $103.84 a barrel and US benchmark crude gained 0.2% to $96.28. The dollar eased to 158.13 yen from 158.69, and the euro rose to $1.1229 from $1.1194. The 10-year Treasury yield rose to 4.96% from 4.91% late Monday, after data showed job openings at the end of September were higher than economists expected [1].
Markets generally prefer divided control in Washington because it lowers the odds of sweeping policy changes, the AP noted. Stephen Brown of Capital Economics said the size of the Democratic gains "does not change too much for the near-term policy outlook," pointing out that Democrats still lack a filibuster-proof Senate majority and that Trump can veto legislation [1].
Technology remained the sensitive spot. The AP said investors have been selling tech shares on concern that AI-related valuations have climbed too far, and that Apple expects thinner margins in its current quarter because higher memory chip costs, driven by demand from AI data centers, are weighing on profits [1]. Reuters reported that Amazon, Alphabet, Microsoft and Meta traded lower in Europe on the Tradegate platform, and said the Nasdaq-100 entered a technical correction on Monday. It also noted that data centers were an issue in the campaign, with Democrats making inroads in Texas and Georgia [2].
On Tuesday in the US, the AP said the S&P 500 rose 0.4% and the Nasdaq composite gained 0.8%, while the Dow Jones Industrial Average fell 197 points, or 0.4% [1].
What to watch next: whether the recovery in futures holds when US cash markets open at 9:30 a.m. ET, how large technology stocks trade after the overnight wobble, and whether Treasury yields keep rising near 5%. Investors will also look for early signals on how a divided Congress approaches policy affecting technology and data centers.
Sources:
[1] Associated Press, "Asian shares and US futures are mixed as Democrats gain majorities in both the US House and Senate" (via KSAT), November 4, 2026. https://www.ksat.com/business/2026/11/04/asian-shares-and-us-futures-are-mixed-as-democrats-gain-majorities-in-both-the-us-house-and-senate/
[2] Reuters, "US stock index futures steady as Democrats seize Congress" (via Yahoo Finance), November 4, 2026. https://finance.yahoo.com/markets/stocks/articles/us-stock-index-futures-steady-083456013.html
[3] Reuters, "US stock futures dip as investors await midterm election results" (via Yahoo Finance), November 4, 2026. https://finance.yahoo.com/markets/stocks/articles/us-stock-futures-dip-investors-010842458.html
This article was produced with AI assistance. It is for informational purposes only and is not financial advice. StockVolt and its authors may hold positions in securities mentioned.