Stock Futures Reverse Gains as Midterm Counts Shift
U.S. stock futures erased early gains as midterm vote counts and prediction markets pointed to a possible Democratic victory in both chambers of Congress. The…
U.S. stock futures reverse gains as early midterm vote counts pointed to a possible Democratic victory in both chambers of Congress, weakening the dollar and sending Treasury yields lower in early Asia trading. Contracts for the S&P 500 fell 0.3% after an initial 0.5% rise, while Nasdaq 100 futures declined 0.6%.
The shift came as prediction markets raised the odds of Democrats taking control of Congress. The move also put technology shares under scrutiny, with investors weighing whether a Democratic victory could bring tighter restrictions on data centers and affect the expansion of artificial-intelligence infrastructure.
What moved markets during the vote count?
Kalshi put the probability of Democrats taking the House of Representatives at roughly 97% and their chances of winning the Senate at about 86%, pointing to the possibility of a sweep. The figures reflected market expectations, not a final election result.
The dollar weakened against most Group-of-10 currencies, while the yield on the benchmark 10-year Treasury note fell four basis points to 4.92%. Treasury prices move in the opposite direction to yields, so the decline indicated buying in government debt as futures retreated.
“Early headlines and prediction markets are suggesting a rising probability of a blue wave,” said Andrew Ticehurst, a senior rates strategist at Nomura Holdings Inc. in Sydney. He said that scenario is generally viewed as negative for the dollar and positive for U.S. Treasuries, adding that markets were reacting consistently with that view in early Asia trading.
The broader regional picture was mixed. The MSCI Asia Pacific Index fell 0.2%, while South Korea’s Kospi Index gained 1%. Millions of Americans voted in races that will decide control of Congress and address local issues. The first polls closed at 6 p.m. Eastern time.
Why are data centers part of the market reaction?
Investors are also considering whether a Democratic win could lead to more restrictions on data centers, a concern tied to the industry’s rapid buildout for artificial intelligence. That possibility has put AI-linked stocks and related investments in focus as election counts develop.
Meta Platforms Inc. raised $15 billion in a U.S. dollar bond sale, drawing solid demand. The company’s offering came as large technology firms sought buyers for debt with higher yields, while some investors questioned the industry’s extensive spending on artificial intelligence.
Other company developments added to the unsettled tone. Nexperia BV filed a lawsuit against owner Wingtech Technology Co., seeking more than $2 billion in damages and escalating a dispute between the chipmaker’s Chinese operations and its global management.
Palantir Technologies Inc. issued a quarterly outlook pointing to a potential slowdown in sales growth. BMW AG cut its profit forecast for the second time in five months as it expands restructuring efforts and faces falling vehicle demand in China.
Walt Disney Co. is moving toward thousands of job cuts, with some managers asked to target 20% in annual cost savings, according to people familiar with the matter.
The election count remains central to the immediate market reaction: Kalshi’s estimates put Democratic control at roughly 97% for the House and about 86% for the Senate.
