By Radarr Africa Business Desk
LAGOS, November 4 (Radarr Africa) – US stock futures and the dollar fell on Wednesday as early results from the United States midterm elections pointed to gains for the Democrats, Reuters reported.
S&P 500 futures were down 0.8 per cent and Nasdaq futures were down 1.8 per cent, according to the Reuters report, published in Singapore. The 10-year Treasury yield fell 6 basis points to 4.906 per cent.
The dollar weakened broadly. The euro rose 0.4 per cent to $1.1239, sterling gained 0.37 per cent to $1.3464, and the dollar index fell 0.32 per cent to 101.39, Reuters said.
In North Carolina, former governor Roy Cooper defeated the Trump-backed Republican Michael Whatley, flipping a Republican-held Senate seat according to media projections. That gave Democrats one of the four net gains they need for a Senate majority, Reuters reported. In Georgia, Democrat Jon Ossoff won re-election.
Democrats were favoured to win the House, while the Senate contest remained a close, state-by-state fight whose outcome was not final, the report said. It added that more than $1.48 billion had been wagered on the midterms, with prediction markets signalling growing expectations of a Democratic sweep of Congress.
Charu Chanana, chief investment strategist at Saxo in Singapore, said markets appeared to be pricing in a stronger Democratic showing, which could reduce expectations for further fiscal stimulus. She said the sharper fall in the Nasdaq reflected concerns about greater regulatory scrutiny of artificial intelligence and big technology companies, and that lower Treasury yields could eventually bring relief.
Other strategists played down the risk. Michael Arone, chief investment strategist at State Street Global Advisors, said: “I don’t think the big risk to markets is from the blue wave.” He said the danger was investors overreacting to it, according to Reuters.
Tai Hui, chief market strategist for Asia-Pacific at J.P. Morgan Asset Management, said “Trump still has veto power”, which he described as a sticking point for the remaining two years. He expected a divided government to limit fiscal deficits and argued that AI, rather than politics, was the bigger market story, Reuters reported.
Jesper Koll of Monex Group in Tokyo took a different view. He said “the AI momentum has turned negative” with or without a Republican majority, according to the report.
In Asia, shares reversed earlier gains despite strong third-quarter results and a forecast from chipmaker AMD, which had helped ease concerns about the AI trade after Intel’s weak outlook the previous week. The MSCI Asia-Pacific index excluding Japan fell 0.5 per cent, South Korea’s KOSPI dropped 1.6 per cent and Japan’s Nikkei fell 3 per cent after returning from a holiday, Reuters reported.
Before the results, TheStreet reported on November 3 that JPMorgan had put the chance of a Democratic “blue wave” at 66 per cent, with an expected move in the S&P 500 of between minus 0.25 per cent and plus 0.50 per cent and lower long-end yields.
On Tuesday, Wall Street closed mixed: the Nasdaq gained 0.83 per cent and the S&P 500 rose 0.36 per cent, while the Dow fell 0.38 per cent, according to TheStreet.
Investopedia reported that House Minority Leader Hakeem Jeffries planned to introduce bills within 100 hours to reverse Medicaid and Medicare cuts, end tariffs and halt the Iran war unless Congress authorises it, citing the New York Times and aides. Democrats would probably still need Republican support to override presidential vetoes, it said.
Oil prices were choppy after hitting a four-week low in the previous session, Reuters said, as investors weighed talks to end the wars in Ukraine and Iran against attacks that could disrupt supplies. It said the effective blockade of the Strait of Hormuz, which previously carried about 20 per cent of global oil supplies, had redirected energy flows and raised inflation worries.
The Reuters report said the election could affect the AI buildout, the US fiscal outlook, defence spending and regulation in healthcare, banking and cryptocurrencies. It noted the final outcome of the Senate contest was still open when the report was published.
