(Corrects to remove Lorie Logan speaking event, which is on Nov 5, not Nov 4)
By Mike Dolan
Nov 4 (Reuters) – US Democrats’ historic sweep of both houses of Congress on Tuesday was well telegraphed for several weeks, though the scale of the landslide will still resonate across markets.
AI and tech-led stock markets initially fell as the results streamed in, reflecting the potential for more regulatory oversight of the AI boom and pushback against the rapid building of data centers.
Other areas potentially affected are crypto markets that will face greater scrutiny and defence, where additional funding plans may run into the sand in the new Congress.
Stock index futures, world equity markets and bitcoin all recovered early losses quite quickly, however, as the outcome had been the best guess in opinion polls and betting markets for some time. But the dollar remained lower against the euro and sterling.
The size of the wins also reduces the likelihood of legal challenges dragging on for days, and even President Donald Trump seemed to accept the outcome by conceding that the Democrats had done a “good job”.
Oil prices were volatile in early trading as attention twists back to the Middle East and what Trump might do next there. Even though crude had fallen sharply this week on continuing mediation efforts there, Trump again insisted overnight that Iran could not be allowed to develop a nuclear weapon, and the US military did launch what it called “defensive” strikes earlier this week.
US Treasury yields slipped as the midterm results rolled in, with the tech and AI wobbles casting a shade over the economic outlook and gridlock set to limit any further spending or borrowing plans over the next two years.
Wednesday’s quarterly refunding details will also be watched closely, as will the week’s big labor market reports. The first of those showed a big jump in job openings in September – another sign of strength in the labor market, but one which will underscore expectations for another Fed rate hike by year-end.
Helping the rebound in tech shares, chipmaker AMD jumped more than 7% before the bell as it comfortably beat earnings forecasts while reassuring investors that demand for AI infrastructure remains strong. The share gains have not yet been pegged back by the election outcome.
CHART OF THE DAY
Meta Platforms is raising $15 billion this week through a five-part dollar bond offering and sold euro-denominated bonds for the first time on Wednesday.
Big Tech is pressing ahead with fundraising even as doubts surface over the strength of the AI boom and US elections raise the possibility of tighter AI regulation and pushback against data center building.
The debt sale comes days after Meta expanded plans for what could become a $97.5 billion equity raise, highlighting the scale of funding the company is seeking for AI infrastructure. And Meta is the second tech giant to tap European bond markets this week after Google parent Alphabet on Monday sold €6 billion of bonds.
TODAY’S EVENTS TO WATCH
• US October private payrolls (8:15 a.m. EST), September trade balance (8:30 a.m. EST), October ISM services PMI (10 a.m. EST)
• US corporate earnings including McDonald’s, Qualcomm, Uber
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