Robert Wolf, a former economic advisor to Obama, and Steve Cortes, a former Trump campaign advisor, discuss the midterm election’s impact on Wall Street.
U.S. stock futures fell sharply as Democrats scored key victories in the midterm elections and the Fox News Decision Desk projected the party will take 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 control of the U.S. Senate after victories in key congressional races across the country.
WHAT THE MIDTERM ELECTIONS COULD MEAN FOR MARKETS, DEBT
A voter marks their ballot in the Kern County Elections Office on Nov. 3, 2026, in Bakersfield, Calif. (Mario Tama/Getty Images)
The results added to uncertainty on Wall Street as investors weighed what a shift in Washington’s balance of power could mean 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 stocks. 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 had increasingly pointed to Democratic control of both chambers as election results rolled in, 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 scrutiny of AI and Big Tech, particularly as investors question lofty valuations and rising AI-related spending.
“However, lower Treasury yields could eventually provide some relief, so the initial selloff may not necessarily be sustained,” she said.
The benchmark 10-year Treasury yield fell 6 basis points to 4.906%.
AFFORDABILITY TAKES CENTER STAGE AS AMERICANS CAST THEIR BALLOTS IN HIGH-STAKES MIDTERMS
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%.
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Markets overseas also moved lower. 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%.
FOX Business’ Eric Revell and Reuters contributed to this report.
