Robert Wolf, Obama’s former economic adviser, and Steve Cortes, Trump’s former campaign adviser, discuss the impact of the midterm elections on Wall Street.
U.S. stock futures fell sharply as Democrats scored major victories in the midterm elections and the Fox News Decision Desk projected the party would control both chambers of Congress.
S&P 500 futures fell 1.3%, while Nasdaq-100 futures fell 2.2%. Futures tied to the Dow Jones Industrial Average slid 0.8%.
Fox News Decision Desk projected Democrats would take control People’s Representative Council and gained control of the US Senate after victories in key congressional races across the country.
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Voters cast their ballots at the Kern County Elections Office on November 3, 2026, in Bakersfield, California. (Mario Tama/Getty Images)
The results added to the uncertainty on Wall Street as investors consider what the shift in Washington’s balance of power could mean for taxes, government spending, Artificial Intelligence, Big Tech, defense, health, banking and cryptocurrency regulation.
“Markets seem to be pricing in the possibility of a stronger-than-expected Democratic vote, which could reduce expectations for further fiscal stimulus,” Charu Chanana, head of investment strategy at Saxo in Singapore, told Reuters.
Historically, changes in congressional control have not hurt stocks. The S&P 500 rose at the end of the year in five of the eight midterm cycles since 1930 when the president’s party lost the House, according to Ned Davis Research.
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Voters cast their ballots on Election Day at the Cross Insurance Center polling location on November 3, 2026, in Bangor, Maine. (Joe Raedle/Getty Images)
The prediction market is increasingly pointing to Democratic control of both chambers as the election results are released, with more than $1.48 billion wagered on the midterm elections.
Chanana said investors may be concerned that Democratic control of Congress could bring greater regulatory oversight of AI and Big Tech, especially as investors question the high valuations and surge in AI-related spending.
“However, lower Treasury yields may eventually provide some relief, so the initial selloff may not be possible,” he said.
The benchmark 10-year Treasury yield fell 6 basis points to 4.906%.
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Kalshi’s billboard displays the possibility of the US Senate midterm elections in Times Square in New York November 2, 2026. (Angelina Katsanis/Bloomberg via Getty Images)
The US dollar also fell. The euro and the British pound gained against the dollar, while the dollar index fell 0.32%.
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Overseas markets are also down. Japan’s Nikkei fell 3%, South Korea’s KOSPI fell 1.6% and an index of Asia-Pacific shares outside Japan declined 0.5%.
FOX Business’ Eric Revell and Reuters contributed to this report.