Asia Stocks Fall, Dollar Weakens as Democrats Lead U.S. Midterms — Update

By Sherry Qin and Fabiana Negrin Ochoa

Asian stocks extended losses and the dollar weakened further Wednesday as Democrats scored a string of victories in the U.S. midterm elections.

The greenback fell to its lowest level in more than a month, while the 10-year Treasury yield dropped to around 4.900%, its lowest since early September. U.S. equity futures sold off, with E-mini S&P 500 futures down 1.1% and Nasdaq futures shedding 2.0%.

Asian stock indexes extended losses as Democrats secured more wins. The party flipped Senate seats in South Carolina and North Carolina and held seats in Georgia and New Hampshire. Republicans are increasingly pessimistic about retaining control of Congress.

"I wasn't on the Ballot and if I was, we would have won IN A LANDSLIDE!" President Trump posted on Truth Social.

Japan's Nikkei Stock Average slid 4.2%, hitting a five-month low and leading declines in Asia. South Korea's Kospi fell 3.9% and Taiwan's Taiex declined 3.2%, on track for its lowest level since late July.

Cryptocurrencies also extended losses, in line with expectations that more Democratic control could potentially be unfavorable for crypto legislation and adoption. Bitcoin was last down 1.2% at 76893.48.

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.

Market reactions to the midterm results will likely hinge less on which party wins than on how the results compare with investor expectations, said Tiger Brokers chief market strategist James Ooi in a note.

Greater clarity could ease some of the uncertainty weighing on sentiment, Ooi added.

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 23:41 ET (04:41 GMT)