Stocks wilt, dollar slides as early midterm results point to blue sweep
SPY•U.S. stock futures fell, Treasury yields declined and the dollar weakened as early midterm results pointed to Democratic gains, including a Senate seat in North Carolina and a projected House majority. S&P 500 futures slid 1.2%, Nasdaq futures fell more than 2% and the 10-year Treasury yield dropped 6 basis points to 4.906%.
1. Early election results
Democrats flipped a Republican-held Senate seat in North Carolina as former governor Roy Cooper defeated Michael Whatley, giving Democrats one of the four net gains they need to secure a majority. Jon Ossoff won re-election in Georgia, while U.S. media projected Democrats were on track to win control of the House.
2. Markets seek safety
U.S. stock futures fell and Treasuries rallied as investors considered the prospect of tighter regulation and legislative gridlock. S&P 500 futures dropped 1.2%, Nasdaq futures fell more than 2%, and the yield on the 10-year Treasury note declined 6 basis points to 4.906%. The dollar index fell 0.37% to 101.34.
3. AI and fiscal concerns
Investors were concerned that a shift in political control could mean greater scrutiny of AI and Big Tech and reduce expectations for further fiscal stimulus. Asian shares also turned lower, with South Korea’s KOSPI down 1.6% and Japan’s Nikkei down 3%; oil prices were choppy as investors weighed supply risks and talks to end conflicts in Ukraine and Iran.
