Stock Futures Rally, Treasurys Strengthen After Democratic Sweep — 3nd Update

By Joe Stonor

Dow futures jumped and Treasurys strengthened after the Democrats delivered a resounding win in the midterm elections.

Equities had fallen sharply when initial results arrived, before reversing course to trade firmly in the green as the scale of the Democratic victory became clear.

Futures for the Dow Jones Industrial Average surged by more than 1,100 points, or 2.15%, putting the index on track for its fourth-best trading day of the year. Nasdaq futures gained 0.3% in volatile trade. Futures for the tech-heavy index dropped by as much as 2.4% overnight, before rallying to highs of over 1.1%. Contracts tied to the S&P 500 also flipped to add 1.1%.

"We are in the best possible outcome for markets," said Lombard Odier's head of investment strategy Nannette Hechler-Fayd'herbe.

The initial market reaction was a knee-jerk response to a surprise result, Hechler-Fayd'herbe said, with gains reflecting the view that a balance of power between Congress and the president would keep both parties in check.

However, cloud-computing stocks fell sharply, with investors concerned that Democratic control of Congress could slow the expansion of AI, Panmure Liberum strategist Joachim Klement said. CoreWeave and Astera Labs led the selloff premarket, each dropping more than 6%. Earnings from Advanced Micro Devices failed to encourage the market, with the chip designer handing back premarket gains of more than 6% to trade flat.

Elon Musk-controlled companies SpaceX and Tesla both fell by more than 5% premarket. The tech titan has poured hundreds of millions of dollars into backing Republican candidates in the midterms.

Asian stock indexes were largely higher. The Shanghai Composite was up 2.2% and Hong Kong's Hang Seng index added 1.45%. European indexes rose strongly across the continent.

Treasurys moved inversely to Nasdaq futures, with a sharp strengthening followed by a paring of gains, though yields were still largely lower. Ten-year yields were recently down around 2.9 basis points to 4.930% and 30-year yields hovered around 5.300%. Two-year yields pulled back, too, to trade below 4.600%.

Oil contracts fell, with benchmark Brent crude for January delivery dropping 3% to trade just above $100 a barrel. President Trump acknowledged in an interview with The Wall Street Journal that higher gas prices resulting from the U.S.-Iran conflict were in part responsible for the Democratic sweep.

Investors are weighing the impact of the midterms on Trump's strategy, with a Democratic-controlled Congress potentially able to constrain Trump's foreign-policy agenda.

The dollar weakened and gold rallied back above $4,000 a troy ounce. Bitcoin rose to hover around $78,400.

For the day ahead, investors will watch the final results trickle in and listen closely to Democrats for clues to their policy priorities. Outside of the election, U.S. data prints include the ISM services index for October, the ADP's report of private payrolls for October and the balance of trade for September.

Write to Joe Stonor at josephmichael.stonor@wsj.com

(END) Dow Jones Newswires

November 04, 2026 09:37 ET (14:37 GMT)