EMEA Morning Briefing: Futures Fall, Dollar Weakens as Democrats Win Senate

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Opening Call:

European stock futures were lower after Asian indexes tipped into the red as the U.S. midterm results pointed to strong Democratic gains. U.S. Treasury yields were lower and the dollar weakened. Oil fell and gold gained.

Equities:

European stock futures were lower as markets tracked U.S. midterm election results. Democrats won a majority in the Senate, the Associated Press said, flipping control of the chamber and delivering a major rebuke to President Trump.

The prospect of a Democratic-led crackdown on artificial-intelligence data centers hit Asian stocks hard, especially in countries that depend on U.S. AI demand. Shares of global tech investor Softbank Group, which has been on an AI investing spree, dropped around 9%.

Still, some analysts warned 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.

Forex:

The U.S. dollar index weakened to a one-month low as Democrats took a lead in the U.S. midterm election results. A Democratic sweep could result in fiscal gridlock and reduce expectations for further U.S. fiscal expansion, weighing on U.S. yields and the dollar, MUFG's Lin Li said.

That would be a boon for Asian currencies, though the impact could be limited because tariff and trade policy remain substantially under presidential/executive control.

Bonds:

The yield on the benchmark Treasury note fell to its lowest level in nearly two months as results from the U.S. midterm elections pointed to a significant swing toward Democrats across the board.

If there is a Democrat sweep in the U.S. midterms, fiscal settings in the U.S. will become more difficult to change over the next couple of year, said Jack Chambers, interest rate strategist at ANZ.

This means perhaps no further expansion of the budget deficit, but it also means the deficit will remain large.

Chambers remains skeptical about how much of a sustained rally can be derived in bond markets from the election. U.S. activity indicators are solid, supporting further Fed hikes, and keeping yields in a higher range.

Energy:

Oil traded lower. Prices have been volatile as traders digest conflicting signals on the progress of U.S.-Iran peace talks, ANZ Research said. While both appear open to diplomacy, Iran also said the U.S. response to its demands was not satisfactory, ANZ noted.

"The most immediate implication of the [U.S.] midterms for financial markets will be the prospect of a resolution in the Middle East or a return to offensive military action by the U.S.," it said.

Metals:

Gold gained. Prices remain under pressure as investors cautiously assess the unfolding U.S. midterm results, slipping to $3,900 before recovering modestly, said Priyanka Sachdeva at Phillip Nova.

The key question is whether the election outcome changes the broader macro environment enough to trigger a reversal in gold or simply adds another layer of uncertainty to an already volatile investment environment.

While easing oil prices offer some relief from inflationary concerns, high Treasury yields, a relatively firm dollar and expectations of further Fed tightening continue to restrict gold's recovery.

Copper edged lower. The market has been awaiting a decision on potential U.S. duties on refined copper, which the Commerce Secretary recommended enforcing at 15% next year, rising to 30% in 2028.

According to Commonwealth Bank of Australia's Angela Durrant even if the Democrats are successful in taking one or both chambers of Congress, they wouldn't be able to override the Section 232 framework. "We anticipate that until there is a final decision made on the Section 232 tariffs, refined copper supply is likely to remain constrained in China and keep premiums elevated," she said.

Iron ore futures gained, supported by near-term supply concerns and higher freight rates lifting landed costs, said China Industrial Futures analysts. However, the broader outlook remains bearish as weak end-user demand and low steel mill profitability could cap blast furnace output, they added.

TODAY'S TOP HEADLINES

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

Early U.S. midterm results set the tone for Asian 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%.

Midterms Electorate Is Deeply Troubled by Trump, Inflation and U.S. Direction

Two years after handing Republicans control of Washington, voters in Tuesday's election expressed displeasure over President Trump's job performance while voicing angst about the cost of living and the nation's overall direction.

Results from a large national survey showed many Americans went to the polls in a sour mood and looked to the midterm election for change in Washington as Democrats appeared well-positioned to take control of the House and had a shot at flipping the Senate.

Iran Turns to Guerrilla Tactics in Bid to Reassert Grip on Strait of Hormuz

DUBAI-Iran is using everything in its arsenal to try to stop the flow of oil leaving the Strait of Hormuz, resorting to guerrilla tactics to shore up the regime's fast-eroding position in the conflict and pile pressure on the Trump administration in deadlocked negotiations.

Tehran has launched bomb-laden undersea drones, fired rocket-propelled grenades and deployed crews to attach limpet mines to ships over recent weeks, part of an asymmetric campaign targeting vessels that shuttle oil out of the Persian Gulf to waiting tankers, according to regional officials, security firms and analysts.

3M Announces $7.4 Billion Settlement in 'Forever Chemicals' Injuries Case

Materials maker 3M announced it has agreed to settle long-running litigation brought by thousands of people who claim they were hurt by the so-called forever chemicals known as PFAS.

The company will pay $7.35 billion over nine years to plaintiffs who have made personal-injury claims related to firefighting foam that contained PFAS. As many as 120,000 plaintiffs could participate in the settlement, 3M said. The agreement is the latest in a string of settlements related to the chemicals.

Silicon Valley Promises AI Will Cure Disease. Drugmaker CEOs Aren't Buying It.

The promises are grandiose: Anthropic's chief executive said artificial intelligence could cure most human diseases within a decade. Another tech exec joked that AI researchers have started smoking cigarettes because they are so confident AI will cure lung cancer.

Pharma executives don't buy it.

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November 04, 2026 00:16 ET (05:16 GMT)