Democrats sweep Congress; US stock futures pare earlier losses

Democrats sweep Congress; US stock futures pare earlier losses
US stocks midday report | Wednesday, 4 November 2026 (Hong Kong time; cash market close refers to Tuesday, 3 November, US Eastern time; European markets opened at 16:00 Hong Kong time and had been open for about half an hour when this report was published. Intraday cash-market gains were not yet available, so this report relies on pre-open futures and news from the European open.)

On Tuesday, the Dow fell 0.40% to 51782.29 points, the S&P 500 rose 0.35% to 7568.05 points, the Nasdaq rose 0.83% to 25365.67 points, and the equal-weight S&P ETF (RSP) closed down 0.33% at 219.26 dollars (Reuters, republished). Before midday, S&P 500 futures were down about 0.3% and Nasdaq 100 futures about 0.4%, having pared more than half their deepest overnight losses; pan-European STOXX 600 futures had fallen more than 1% at one point before narrowing their loss to about 0.2% ahead of the open (Reuters). The 10-year US Treasury yield was about 4.90%, down roughly 6 basis points from Tuesday's close. WTI crude was around 96.2 dollars per barrel, spot gold was around 4016 dollars per ounce, back above 4000 dollars, and the US dollar index was around 101.5 (Reuters, republished) (Reuters, republished).

Market theme
The midday market is telling two versions of the same story: overnight futures initially fell sharply on a “Democratic sweep of Congress and tighter AI regulation,” with Nasdaq 100 futures down more than 2% at one point. But once the result was confirmed, and divided government meant that large-scale fiscal expansion would be harder to advance, losses narrowed, bonds rose and gold strengthened—the market shifted from “fearing regulation” to “fearing gridlock, but also accepting that gridlock would push yields lower.” Reuters said Democrats took control of both chambers of Congress, a major setback for President Trump, driven chiefly by voter dissatisfaction with the war with Iran, the cost of living and tariff policy (Reuters). Reuters' Asian-session report said S&P 500 futures fell 1.2%, Nasdaq futures fell more than 2%, the 10-year yield dropped 6 basis points to 4.906%, and the dollar index fell 0.37% to 101.34 (Reuters, republished). The key is not which party won, but that the market sees “obstacles to data-center construction” as the most immediate policy risk for the AI trade. That is also why the Nasdaq fell much more than the Dow: the decline was concentrated in the very front end of the AI supply chain rather than across the whole market.

One. Futures and European markets: steep overnight losses narrow at the European open; chip stocks buck the trend

• Futures followed a classic pattern of “panic first, digest later”: Reuters said European futures fell 1.4% overnight, before STOXX 600 futures narrowed their loss to about 0.2%; German DAX futures were down about 0.2% and UK FTSE 100 futures about 0.4% (Reuters, republished). The narrowing itself is informative: the market initially priced in the “worst regulatory scenario,” then recognized that divided government also makes tax increases and major spending harder to pass—the panic premium was the first part to unwind.
• After European markets opened, chip stocks did not follow futures lower. The Wall Street Journal's intraday observations noted that European semiconductor shares rose, with ASML up 1%, ASM International up 0.9%, Infineon up 1.4% and STMicroelectronics up 1.5%, against the backdrop of AMD's strong earnings (The Wall Street Journal). The countertrend rise in European chip stocks suggests earnings evidence is offsetting political concerns—when AMD demonstrates that data-center demand remains, the market is willing to price “regulatory risk” separately from “demand itself.”
• Asia had already completed this round by the close: the Nikkei 225 fell 1.42% to 62188.63 points, its lowest since 30 July, led lower by chip and metals shares (The Wall Street Journal). Reuters' Asian-session report said the MSCI Asia Pacific ex-Japan index fell 0.5% and South Korea's KOSPI fell 1.6% (Reuters, republished). Asia fell more than Europe because futures were still at their deepest losses when Asian markets closed—the time-zone difference meant Asia absorbed the panic before Europe, while Europe had already seen losses narrow by its open.
• The details of the election results deserve a separate look: Reuters said Democrats won their first Senate seat in Kansas since the Great Depression, defeated a Senate candidate personally endorsed by Trump in South Carolina, and won a Senate seat in Texas while defeating three-term Governor Abbott (Reuters). Texas is one of the states where data-center construction is most concentrated—the state-level result, combined with control of Congress, is why AI stocks were singled out overnight, rather than simply because “Democrats won.”

Two. Bonds, the dollar and commodities: yields retreat, the dollar weakens and gold returns above 4000 dollars

• Bonds were the clearest beneficiary at midday: Reuters said the 10-year US Treasury yield fell 6 basis points to 4.906%, while the 2-year yield fell 5 basis points to 4.566% (Reuters, republished). Tuesday's story was still “better-than-expected data push yields higher”; by Wednesday it had become “divided government pushes yields lower.” In two days, the driver of bond trading shifted from economic data to political structure. That is also why tonight's Treasury refunding plan is drawing particular attention: the scale of supply will test how far “gridlock suppresses yields” can go.
• A weaker dollar and stronger gold are two sides of the same coin: Reuters said the dollar index fell 0.37% to 101.34, the euro rose 0.5% to 1.1249 dollars, and sterling rose 0.37% to 1.3464 dollars (Reuters, republished). A Reuters intraday report said spot gold rose 2.2% to 4016.01 dollars per ounce (Reuters, republished). Gold's return above 4000 dollars and the dollar's fall to near a more-than-one-month low show that a combination of haven demand and dollar weakness did emerge at midday—but it had not become full-blown panic, since equity futures had already pared more than half their losses.
• Oil prices were broadly flat at midday, and the geopolitical premium did not widen again: an Asian-session report republished by Dow Jones said WTI crude futures rose 0.1% to 96.18 dollars per barrel and Brent rose 0.1% to 103.73 dollars per barrel, reversing early losses (Dow Jones, republished). Oil's lack of a decline or a sharp rise suggests the election result did not change the market's basic assessment of the Iran talks—the main sources of midday volatility were technology stocks and bonds, not energy.

Three. Individual stocks and sector moves, including earnings: AMD is the bulls' only hard evidence; consumer and chip reports are next tonight

• AMD's results remain the strongest card in the bulls' hand at midday: Barron's said AMD's third-quarter adjusted earnings per share were 2.09 dollars, above the expected 1.95 dollars; revenue rose 45% year over year to 13.4 billion dollars; and fourth-quarter guidance of 17 billion dollars was well above expectations of 16.3 billion dollars. Its shares rose 7.6% after hours (Barron's). Against a backdrop of broad overnight pressure on AI stocks, AMD still held its after-hours gains—allowing both “AI demand is real” and “AI regulation will tighten” to be true. At midday, the market's choice is to trust earnings first and watch regulation next.
• The premarket focus shifts to consumer and platform companies: McDonald's, Uber and CVS will report before the open, followed by Qualcomm and Arm after the close (Reuters). McDonald's and Uber answer whether US consumers are still spending; Qualcomm and Arm answer whether AMD is the only company seeing strong chip demand. However intense the midday election narrative, tonight's earnings are the next test of whether technology stocks can hold their rebound.
• Actual trading volume at tonight's open will be the first vote: narrower futures losses do not guarantee that cash equities will follow, and midday pricing still rests on thin overnight trading volumes.

Four. AI news: data centers become a political issue; regulatory concerns outweigh earnings positives

• Data-center construction has become a political variable influencing US stock futures for the first time: Reuters said investors worry that Democratic control of Congress could bring tighter regulation of data-center construction and thereby weigh on AI investment (Reuters). The Wall Street Journal's intraday observations said voter opposition to data centers crosses party lines, but Democratic candidates are generally more skeptical of AI (The Wall Street Journal). This adds “construction permitting risk at the local and federal levels” to the list of risks for the AI trade. It does not change long-term demand, but it will change the speed and cost of construction, two of the most sensitive variables in valuation models.
• The logic of a rebound amid the correction has not changed, but the standard of proof is higher: Reuters said the Nasdaq 100 had fallen more than 10% from its record high on 6 October, confirming a technical correction, amid investor concern that big technology companies' huge AI infrastructure spending exceeds near-term cash returns (Reuters, republished). AMD demonstrated demand, but did not answer the question of return on investment. With regulatory uncertainty now added, the market's demands for the next AI earnings report will only grow: it must not only beat expectations, but also show that spending is turning into cash.

Five. Forward calendar (Hong Kong time)

• 4 November (Wednesday), 21:15: US ADP employment report for October; 21:30: US Treasury releases its quarterly refunding plan and the US trade balance for September is published; 23:00: US ISM services PMI for October; before the open: McDonald's, Uber and CVS report earnings; after the close (early 5 November Hong Kong time): Qualcomm and Arm report earnings (Reuters).
• 4 November (Wednesday): eurozone preliminary inflation for October is released; Sweden's central bank announces its interest-rate decision.
• 5 November (Thursday): Airbnb reports earnings.
• 6 November (Friday), 21:30: US nonfarm payrolls report for October (Bureau of Labor Statistics), the week's key economic release; Moderna reports earnings.
• Note: The US has moved to standard time. Regular US stock-market hours correspond to 22:30 to 05:00 the following day in Hong Kong. Votes are still being counted for the final distribution of midterm election seats; at publication, control of both chambers of Congress had been determined, but the exact sizes of the majorities had not been finalized.
• Intraday gains in European cash markets were not yet available for this report; the evening report will use closing figures.