Democratic Sweep Reshapes the US Political Outlook: A Democratic sweep of the House and Senate sent ripples across global markets. The party won several previously Republican-held Senate seats, including Texas, which elected its first statewide Democrat since 1994. Democrats are now clear favourites to win the 2028 presidential election, with their chances priced at around 78%.
Stocks and Dollar Fall as Treasuries Rally: Stocks and the dollar declined, while US government bonds advanced as investors priced in greater political gridlock and further obstacles to President Trump’s agenda. S&P 500 and Nasdaq 100 futures fell 0.3% and 0.4%, respectively, amid concerns that tighter regulatory scrutiny could weigh on technology and artificial intelligence companies. Bonds benefited from expectations that further tax cuts and government spending would become more difficult to pass, with the five-year Treasury yield falling as much as nine basis points to 4.67%.
Swiss Franc, Yen and Euro Strengthen: The Swiss franc gained 0.5% against the dollar, while the yen and euro both strengthened by 0.4%. Concerns that Democratic control could slow data centre construction and the AI investment boom added further pressure on the dollar.
KOSPI Volatile as AMD Signals Strong AI Demand: South Korea’s KOSPI rose 3.2% before falling as much as 4%, later recovering to trade 1% higher. AMD issued a sales forecast that exceeded analysts’ expectations and pointed to strong demand for data centre processors. Bitcoin fell 2.8% on concerns that Democratic control could delay industry legislation and bring tougher scrutiny, before recovering to around $78,000 this morning.
Key Market Moves Today
- S&P 500 Futures: -0.11% (7,588)
- Crude Oil: +0.05% ($96.15)
- Spot Gold: +2.45% ($4,026)
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