Stock futures saw mixed trading as Democrats appeared poised for significant wins in the U.S. midterm elections, potentially leading to increased regulation for AI and data center industries. S&P 500 and Nasdaq futures declined, while the Dow Jones Industrial Average futures edged higher.
Concerns over potential restrictions on data centers and AI infrastructure are weighing on tech stocks, though AMD reported strong earnings, initially boosting its shares. European markets opened higher, while Asian markets closed mixed. The dollar weakened, and Treasury yields fell as investors sought safer assets.
Stock futures experienced a mixed start on Wednesday as traders assessed the potential market impact of Democrats securing control of Congress and key gubernatorial wins in the 2026 U.S. midterm elections. S&P 500 futures dipped 0.14%, and Nasdaq-100 futures shed 0.22%, while Dow Jones Industrial Average futures edged up by 0.18%, recovering from earlier lows.
The Democratic Party is projected to have swept to victory, claiming control of Congress. Additionally, Texas Democratic gubernatorial candidate Gina Hinojosa is anticipated to win against Republican incumbent Greg Abbott. Hinojosa's platform includes a pledge for a moratorium on data centers in the state's tech hub, raising concerns among investors about the future of AI infrastructure development.
Analysts suggest that Democratic control of both the House and Senate could negatively impact sectors like artificial intelligence, particularly stocks associated with the AI buildout. Investors are wary of potential increased restrictions on data centers nationwide, a concern that has already contributed to recent pullbacks in AI-linked stocks due to apprehension about slowing data-center spending.
In overnight trading, Big Tech shares showed mixed performance. Microsoft saw a decline, while Amazon rose by 0.28%. Nvidia, a key player in the AI space, was up 0.27%. However, Elon Musk's ventures experienced significant drops, with SpaceX down 4.8% and Tesla shares falling 4.1% on Robinhood. Data center company CoreWeave also declined by 3.7%, and Alphabet was down 0.6%.
"Equities trended lower as it's looked more likely that Democrats are going to pick up the House and most likely the Senate," said Anthony Saglimbene, chief market strategist at Ameriprise Financial. "If you get some governorships that are Democratic, what does that mean for the data center buildout, which has already seen a lot of skepticism... in terms of the hyperscaler capex spending?"
Meanwhile, AMD shares initially surged double digits in post-market trading after exceeding third-quarter earnings and revenue expectations. The stock was last seen up 5% on Robinhood.
Renewable energy stocks, particularly solar, traded higher on speculation that a Democratic majority would halt policies detrimental to the industry. The Invesco Solar ETF (TAN) was up 3% in Robinhood trading.
President Donald Trump's comments to The Wall Street Journal, suggesting a willingness to work with Democrats, may have slightly eased market pressure overnight.
European Markets Open Higher
European stock markets opened in the green, with the pan-European Stoxx 600 adding 0.44%. Banks led the gains, up 1.83%, followed by basic resources and utilities. Italian's FTSE MIB led regional bourses, up 0.88%, with the U.K.'s FTSE 100, France's CAC 40, and Germany's DAX also posting gains.
Asia Markets Close Mixed
Asia-Pacific markets closed mixed, with South Korea's Kospi rising 0.62% and the Kosdaq adding 1.5%. Japan's Nikkei 225 pared losses to close 1.42% lower, and the Topix declined 0.89%. Mainland China's CSI 300 gained 2.31%, while Hong Kong's Hang Seng Index was 1.43% higher. Australia's S&P/ASX 200 fell 0.59%.
Dollar Slides as Democrats Take Control of Congress
The U.S. dollar weakened against major currencies as Democrats gained control of Congress. The euro was up 0.39% against the dollar at $1.1235, and the British pound rose 0.48% to $1.13476. The dollar index, tracking the greenback against a basket of six currencies, was down 0.39%.
Treasury Yields Fall Amidst Midterm Uncertainty
Treasury yields moved lower as investors sought refuge from equity futures sell-offs. The benchmark 10-year Treasury note yield slipped 1 basis point to 4.9311%, the 30-year bond yield fell 1 basis point to 5.3136%, and the 2-year note yield pulled back 1 basis point to 4.6017%.
— Hugh Leask, Lee Ying Shan, Lim Hui Jie, Fred Imbert, Sean Conlon, Sarah Min, Oliver Renick, Deena Zaidi, Nick Wells, John Melloy, Darla Mercado
