Oil and data centre stocks sink after US midterms
SPY•Oil fell nearly 9% overnight, with Brent down about 20% for the week, as hopes for an end to the US-Iran war grew after Democratic midterm wins. Asian data-centre stocks also slid on expectations of tougher regulation, while solar shares rose.
1. Oil and markets react
Brent crude futures fell nearly 9% overnight to below $100 a barrel and were down about 20% for the week. At $93.50, oil was testing overnight lows in Asia as traders bet that a Democratic Congress would make President Donald Trump less likely to escalate the war with Iran.
2. Stocks diverge in Asia
Solar supply-chain stocks rose in anticipation of increased support for renewables, while data-centre companies and equipment suppliers fell on expectations of tougher regulation. South Korea’s KOSPI slid 4%, Taiwan’s benchmark index fell 1.8%, and Japan’s Nikkei was down 0.5%. Analysts expected any slowdown in data-centre construction to be temporary and said it would not ultimately dent demand for AI, data centres or computer chips.
3. Yields move lower
Lower energy prices helped lift bonds and stocks, while the dollar fell to a one-month low against the euro. The 10-year US Treasury yield fell 6 basis points overnight and another basis point in early Tokyo trading, to 4.87%; the two-year yield dropped about 2 basis points to 4.56%. Trump acknowledged that the war played a role in Republicans’ election defeat, and Vice President JD Vance wrote, “The reason we lost is the war.”
