Stocks and Dollar Slide as Democrats Notch Early Midterm Wins

Are markets already pricing in a shift in Washington? Stocks and the dollar slid after early Democratic wins in the US midterm elections, with S&P 500 futures down 0.8 percent and Nasdaq futures down 1.8 percent. The US 10-year yield dipped six basis points to 4.906 percent. The reaction was immediate across asset classes.

Democrat Roy Cooper beat Republican Michael Whatley in North Carolina, flipping a Senate seat and delivering one of the four net gains Democrats need for a majority. The euro rose 0.4 percent to 1.1239 dollars, sterling gained to 1.3464, and the dollar index fell 0.32 percent to 101.39. Traders are watching Senate counts closely.

Asia felt the pressure too, with the Nikkei down about 3 percent, the KOSPI off 1.6 percent and MSCI Asia-Pacific excluding Japan down 0.5 percent. Strong AMD results eased some artificial intelligence worries, while oil stayed choppy with the Strait of Hormuz effectively blockaded. More than 1.48 billion dollars was wagered on the elections in prediction markets.