Markets fell after Democrats won the House and Senate, as investors weighed possible hurdles for data-centre expansion and other policy changes. Treasuries rallied, the dollar weakened and two-year yields fell almost 8 basis points to 5.5458%.
Wall Street futures led losses in Asia, with technology shares in Japan, Taiwan and South Korea also falling. European share futures were down, while the US dollar weakened and Treasuries rallied.
Investors were concerned Democrats would favour more regulation of AI and data centres, though analysts noted bills could be vetoed by President Trump. Democratic gains in state governorships could create local hurdles for data-centre construction, including rules on water and power; analysts were particularly concerned about the Texas governorship changing hands.
The prospect of hurdles for data centres was seen as potentially weighing on a major engine of US economic growth and easing inflationary pressure. Fed funds futures priced out about 6 basis points of hikes for next year, while two-year yields fell almost 8 basis points to a two-month low of 5.5458%. The Treasury refunding announcement was due later Wednesday, with markets looking for less longer-term borrowing.
