U.S. stock futures declined sharply after Democrats secured pivotal victories in the midterm elections, with the Fox News Decision Desk projecting the party will win control of both chambers of Congress.
S&P 500 futures fell 1.3%, while Nasdaq-100 futures dropped 2.2%. Futures tied to the Dow Jones Industrial Average slid 0.8%.
The Fox News Decision Desk projected Democrats will control the House of Representatives and gain a majority in the U.S. Senate following wins in critical congressional races nationwide.
A voter marks their ballot in the Kern County Elections Office on Nov. 3, 2026, in Bakersfield, Calif. (Mario Tama/Getty Images)
The results injected fresh uncertainty into Wall Street as investors assessed the implications of a shift in Washington’s balance of power for taxes, government spending, artificial intelligence, Big Tech, defense, health care, banking, and cryptocurrency regulation.
“Markets appear to be pricing in the possibility of a stronger-than-expected Democratic showing, which could reduce expectations for further fiscal stimulus,” Charu Chanana, chief investment strategist at Saxo in Singapore, told Reuters.
Historically, shifts in congressional control have not derailed equities. The S&P 500 rose through year-end in five of eight midterm cycles since 1930 when the president’s party lost the House, according to Ned Davis Research.
Voters cast their ballots on Election Day at the Cross Insurance Center polling location on Nov. 3, 2026, in Bangor, Maine. (Joe Raedle/Getty Images)
Prediction markets increasingly signaled Democratic control of both chambers as results rolled in, with more than $1.48 billion wagered on the midterm elections.
Chanana noted that investors may be concerned that a Democratic-led Congress could bring heightened regulatory scrutiny of AI and Big Tech, particularly as market participants question elevated valuations and rising AI-related capital expenditures.
“However, lower Treasury yields could eventually provide some relief, so the initial selloff may not necessarily be sustained,” she added.
The benchmark 10-year Treasury yield fell 6 basis points to 4.906%.
Kalshi billboards displaying U.S. Senate midterm election odds in Times Square in New York Nov. 2, 2026. (Angelina Katsanis/Bloomberg via Getty Images)
The U.S. dollar also weakened. The euro and British pound both gained against the dollar, while the dollar index fell 0.32%.
Overseas markets moved lower in sympathy. Japan’s Nikkei fell 3%, South Korea’s KOSPI dropped 1.6%, and a broad index of Asia-Pacific stocks outside Japan declined 0.5%.
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