U.S. Stock Futures Tumble as Democrats Win Key Midterm Races; Nasdaq-100 Futures Down 2.2%, Fox Business Reports
S&P 500 futures fell 1.3% as the Fox News Decision Desk projected Democrats would control both chambers. Analysts say Democratic control could mean more scrutiny of AI and Big Tech, but that the selloff may not last.
U.S. stock futures fell sharply late Tuesday as Democrats won key midterm races, Fox Business reports.
The numbers. S&P 500 futures were down 1.3% and Nasdaq-100 futures down 2.2%. Futures tied to the Dow Jones Industrial Average slid 0.8%. Fox says the 10-year Treasury yield fell 6 basis points to 4.906%, and the dollar weakened, with the dollar index down 0.32%. In Asia, Japan's Nikkei fell 3% and South Korea's KOSPI dropped 1.6%.
The trigger. The moves followed the Fox News Decision Desk projection that Democrats will control the House and gain control of the Senate. Fox says investors are weighing what a change in power could mean for taxes, government spending, artificial intelligence, Big Tech, defense, health care, banking and crypto regulation. It adds that prediction markets increasingly pointed to Democratic control of both chambers as results came in, with more than $1.48 billion wagered on the elections.
The analyst view. Charu Chanana, chief investment strategist at Saxo in Singapore, told Reuters that markets appear to be pricing in a stronger Democratic showing "which could reduce expectations for further fiscal stimulus." She said investors may worry about tougher regulatory scrutiny of AI and Big Tech while they already question high valuations and rising AI spending. She also said lower Treasury yields "could eventually provide some relief, so the initial selloff may not necessarily be sustained."
The history. Fox cites Ned Davis Research: since 1930, the S&P 500 has risen through year-end in five of eight midterm cycles in which the president's party lost the House.
What we could not check. Futures prices move through the night, and these figures are a snapshot from Fox's report. The report does not say where the market opened Wednesday. Check a live quote before relying on any number here.