Oil Extends Decline, Asian Stocks Mixed on U.S. Midterms — Update

By Sherry Qin and Kimberley Kao

Oil extended its decline and Asian stocks were mixed Thursday following Democrats' decisive wins in the U.S. midterms, which brightened prospects for Middle East peace but clouded the outlook for AI spending.

"The Democratic sweep of both the House and Senate at the U.S. midterm election represents a meaningful shift in the political landscape and has triggered an unwind of part of the political and geopolitical risk premium embedded in markets," said MUFG's Lloyd Chan.

Crude futures responded decisively overnight, with both Brent and West Texas Intermediate futures slumping more than 8% on Wednesday. The selloff spilled into Asian trading, with front-month WTI crude-oil futures down 1.4% at $86.93 a barrel and Brent futures 0.8% lower at $93.85 a barrel on Thursday.

Asian bond yields declined. The 10-year Japanese government bond yield fell 5.8 basis points to 2.76% on Thursday. The yield on 10-year Australian sovereign securities dropped 7.1 basis points to 5.018%, while the yield 10-year New Zealand government debt fell 7 basis points to 4.656%.

President Trump acknowledged in an interview with The Wall Street Journal that the Iran war had contributed to Republican losses, though he said he did not regret the conflict.

The prospect of lower jet-fuel costs lifted Asian airline stocks, with Singapore Airlines and Cathay Pacific adding 3.2% and 2.2%, respectively, while Japan Airlines rose 6.2%.

Meanwhile, the fall in oil prices pressured energy and shipping stocks. PetroChina and Sinopec fell 4.0% and 0.9%, respectively, in Hong Kong. Cosco Shipping Energy Transportation dropped 6.5% in Hong Kong while Mitsui O.S.K. Lines fell 7.5% in Tokyo.

The broader outlook for Asian equities remained mixed as investors weighed future AI regulation following the election. The immediate risk to the AI boom probably comes at the state level, where governors and legislatures can impose new restrictions on construction relatively quickly, said Jonas Goltermann, chief markets economist at Capital Economics.

Asian chip stocks mirrored declines by their U.S. peers. South Korea's SK Hynix and Samsung Electronics fell 8.5% and 6.5%, respectively. The selloff in Korean semiconductor stocks triggered a temporary trading halt on the main Kospi bourse, which was last down 5.1%.

Taiwan's Taiex was down 2.9%, while Japan's Nikkei Stock Average declined 1.5% with Kioxia Holdings slumping 10%.

In contrast, Chinese semiconductor stocks rose broadly. AI chip maker Moore Threads gained 4.0% in Shanghai, while Shanghai Biren Technology and Chinese contract chip maker SMIC rose 2.2% and 0.65% respectively, in Hong Kong.

The Hang Seng Tech Index jumped 4.5% as investors rotated into e-commerce platforms like Alibaba and Meituan, with both stocks rising more than 7% each.

Spot gold gained as lower oil prices boosted investor appetite for precious metals, trading up 1.8% at $4,133.55 an ounce.

Write to Sherry Qin at sherry.qin@wsj.com and Kimberley Kao at kimberley.kao@wsj.com

(END) Dow Jones Newswires

November 05, 2026 01:02 ET (06:02 GMT)