Global markets reacted sharply as Democrats won control of both chambers of Congress in the US midterm elections. The scale of the blue wave surprised Wall Street, which had expected only a ripple, leading to a slide in stock futures. Asian stocks fell to their lowest levels in over six months, and Japanese equities sank amid indications of Democratic gains.
The technology sector led the losses, sparking concerns about the durability of the artificial intelligence boom. The S&P 500 experienced its worst daily decline in more than a year, while the Nasdaq Composite fell nearly 5% early Thursday. The Dow Jones Industrial Average dropped 1,000 points after a 1,500-point jump on Wednesday. Asian semiconductor shares also dropped as investors weighed the future of the AI build-out.
European stock index futures fell due to the prospect of tighter regulatory scrutiny and corporate regulation, particularly for technology and artificial intelligence companies. In Asia, investors weighed the possibility of tighter AI regulation and political gridlock in Washington, while oil prices also declined. However, tech stocks rallied after the vote, suggesting that markets are now betting on a more measured build-out.