Tech Declines, Dollar Weakens in Asia as U.S. Midterm Votes Roll In

By Sherry Qin and Fabiana Negrin Ochoa

Early U.S. midterm results set the tone for Asia markets on Wednesday, with technology shares falling and the dollar weakening sharply as polls increasingly swing in the Democrats' favor.

The greenback softened to one-month lows while 10-year Treasury yields were trading at their lowest levels since early September, drifting down to around 4.89%. U.S. equity futures sold off, with CME data showing contracts tied to the Nasdaq index down about 1.8%.

Asian equities indexes made a U-Turn after opening mostly higher, tipping into the red as the race pointed to a Democratic lead.

In a key Senate battle in Georgia, Democratic Sen. Jon Ossoff won, while Democrat Jamie Ager won election to represent North Carolina's 11th Congressional District in the House, flipping a seat held by Republicans.

Japan's Nikkei Stock Average was down 2.9% and South Korea's Kospi was 1.5% lower. Taiwan's Taiex dropped 0.3% and Singapore's FTSE Straits Times Index was off by 1.2%.

Cryptocurrencies also extended losses, consistent with expectations that more Democratic control could potentially be unfavorable for crypto legislation and adoption. Bitcoin and Ethereum were down over 1% each.

A key source of worry for markets is that a decisive Democrat win could hurt the AI spending momentum that has been an engine of growth for many major Asian economies and markets this year.

If those fears crystallize it would be bad news for Asia's AI infrastructure players, which have already suffered rounds of selloff recently amid heightened scrutiny on high valuations and the risk that returns won't match investment hopes.

Still, analysts warn against reading too much into the midterm outcomes.

"The election result may affect the path of fiscal negotiations and generate near-term volatility, but economic growth, corporate earnings, AI investment, inflation, and interest rates should remain more important market drivers," said Mark Haefele, global wealth management chief investment officer at UBS Switzerland.

Ninghui Liu, head of investment strategy & research APAC at State Street Investment Management, favors diversification and balance-sheet resilience over concentrated election trade.

"In equities, that means retaining selective exposure to technology growth while balancing it with businesses supported by domestic demand, recurring cash flows and less dependence on external financing," said Liu.

--James Glynn contributed to this report

Write to Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

November 03, 2026 21:30 ET (02:30 GMT)