Nasdaq futures fall 2.4% then rebound as Democrats win Congress
Key Facts
Wall Street stocks rose on Wednesday, November 4, after recovering from steep early losses as Democrats continued to make gains in the midterm elections, according to a Sky News report. Nasdaq 100 futures fell as much as 2.4%, while S&P 500 futures dropped 1.4%. Futures then rebounded to gains of 0.16% for the Nasdaq 100 and 0.35% for the S&P 500. In Wednesday morning trading, the S&P 500 futures contract rose 0.2% and the Dow Jones Industrial Average futures contract gained 0.4%, according to the Associated Press. The agency confirmed that Democrats had won control of both chambers of Congress, a political shift that put its legislative and regulatory implications at the forefront of investors’ calculations.
Stephen Brown, an analyst at Capital Economics, said the scale of the Democrats’ gains “does not change the near-term policy outlook much.” He noted that Democrats do not have a Senate majority that would allow them to overcome a filibuster, and the president retains veto power. Deborah Cunningham of Federated Hermes said divided government usually impedes the passage of new legislation, which broad financial markets view positively as uncertainty recedes. She said such a division “usually creates an impediment to new legislation, an environment that broad financial markets have traditionally viewed positively.” The result therefore prompted differing readings: the possibility that constraints on the president’s legislative agenda would persist, and questions about which policies could be affected by Democratic control.
One area of focus concerns regulation, taxes and oversight of artificial intelligence and cryptocurrencies, where rules could tighten as the balance of power in Congress shifts, according to a Sky News report. A strategist said Georgia and Texas account for about one-third of spending and projects tied to AI data centers. He added that Democratic victories in the two states could affect the sector’s expansion. The issue bears directly on the valuation of technology companies and infrastructure projects that require significant investment. But the session’s share-price moves also showed that investors were reassessing the political results’ impact, rather than treating them as a single, settled signal for the market’s direction.
The political volatility came as U.S. economic data released the previous day showed strength in factory orders and the labor market. Orders rose 1.8% in September, after an upwardly revised gain of 0.3% in August, exceeding economists’ forecast of 1.2%, according to data reported by Reuters via MarketScreener. The report attributed the increase to a 28.3% surge in bookings for civilian aircraft and parts, while machinery orders rose 1.5% and orders for computers and electronic products increased 0.8%. In the Job Openings and Labor Turnover Survey, job openings stood at 7.523 million in September, up from 7.190 million in August. Quits also rose to 3.4 million, while layoffs and discharges held largely unchanged at 1.6 million, according to the Bureau of Labor Statistics.
In bond markets, the yield on the 10-year U.S. Treasury fell 3 basis points to 4.92%, after dropping as much as 6 basis points overnight to 4.89%, according to Reuters via Investing.com. The European Stoxx 600 rose 0.5% in early trading, while U.S. futures returned to positive territory after falling as much as 2% overnight. Kathleen Brooks of XTB said the results had had a limited impact on markets up to that point. She added that investors would shift from trading on election uncertainty to assessing what the results meant for policy, putting upcoming government decisions in focus. The October Job Openings and Labor Turnover Survey is scheduled for release on December 1, 2026, according to the Bureau of Labor Statistics’ official schedule.