Stock Futures Turn Higher, Treasurys Strengthen After Democratic Sweep -- Update

By Joe Stonor

U.S. stock futures rose and Treasurys strengthened after the Democrats delivered a resounding win in the midterm elections.

Equities fell sharply when initial results arrived, before paring losses and trading in the green as the scale of the Democratic victory became clear.

Nasdaq futures reversed earlier falls to rise 0.2%. S&P 500 futures also flipped to gain 0.2%, while contracts tied to the Dow Jones Industrial Average added 0.3%.

"We are in the best possible outcome for markets," said Lombard Odier's head of investment strategy Nannette Hechler-Fayd'herbe.

The initial market reaction was a knee-jerk response to a surprise result, Hechler-Fayd'herbe said, with gains reflecting the view that a balance in power between Congress and the president would keep both parties in check.

Chip stocks rallied despite investor concerns that Democratic control of Congress could slow the expansion of AI, Panmure Liberum strategist Joachim Klement said. Earnings from Advanced Micro Devices--up more than 7% in premarket trading--encouraged the sector.

Elon Musk-controlled companies SpaceX and Tesla both fell by around 5% premarket. The tech titan has poured hundreds of millions of dollars into backing Republican candidates in the midterms.

Asian stock indexes were largely higher. The Shanghai Composite was up 2.2% and Hong Kong's Hang Seng index added 1.45%. European indexes also rose.

Treasurys moved inversely to Nasdaq futures, with a sharp strengthening followed by a paring of gains, though yields were still lower across the curve. Ten-year yields last fell back around 2.9 basis points to 4.930% and 30-year yields hovered around 5.305%. Two-year yields edged lower to 4.610%.

Oil contracts nudged higher, with benchmark Brent crude contracts for January delivery adding 0.4% to trade around $104.10 a barrel. President Trump acknowledged in an interview with The Wall Street Journal that higher gas prices resulting from the U.S.-Iran conflict were in part responsible for the Democratic sweep.

Investors are weighing the impact of the midterms on Trump's strategy, with a Democrat-controlled Congress potentially able to constrain Trump's foreign-policy agenda.

The dollar weakened and gold rallied back above $4,000 a troy ounce. Bitcoin hovered below $78,000.

For the day ahead, investors will watch the final results trickle in and listen closely to Democrats for clues to their policy priorities. Outside of the election, U.S. data prints include the ISM services index for October, the ADP's report of private payrolls for October and the balance of trade for September. Qualcomm and McDonald's are among companies reporting earnings.

Write to Joe Stonor at josephmichael.stonor@wsj.com

(END) Dow Jones Newswires

November 04, 2026 04:09 ET (09:09 GMT)