Stock futures jump as Democrats seize control of both Congress chambers

U.S. stock futures surged Wednesday following midterm election results that granted Democrats majorities in both the House and the Senate. The shift in congressional power immediately altered market expectations for policy stability, with investors favoring a divided government that curtails sweeping executive changes.

Traders focused on sectors directly tied to the new legislative balance. Wind energy stocks climbed as the market priced in potential support for renewable infrastructure. Conversely, defense shares fell on the prospect of a reduced military posture in the ongoing conflict in Iran. Dow Jones futures rose 1.4% and S&P 500 futures gained 1%, while Nasdaq Composite futures recovered from an earlier dip in artificial intelligence names to gain 0.54%.

Stephen Brown of Capital Economics noted that the Democratic gains do not drastically alter the near-term policy outlook. He pointed out that the party still lacks a filibuster-proof majority in the Senate, and President Donald Trump retains the power to veto legislation.

Asian markets reacted unevenly to the results. Japan’s Nikkei 225 index dropped 1.4% to 62,188.63, while Taiwan’s Taiex lost 0.8%. South Korea’s Kospi index rose 0.6% to 5,683.80. In that market, memory chipmaker SK Hynix edged down 0.1% and Samsung Electronics slid 0.7%. Japanese memory chipmaker Kioxia Holdings tumbled 5.4% amid concerns that safety regulations might slow AI data center construction.

European indices posted gains in early trading. The CAC 40 in Paris rose 1.6% to 8,148.42. Britain’s FTSE 100 increased 1.25% to 10,770.95, and Germany’s DAX climbed 1.5% to 26,249.34. Oil prices declined, with Brent crude falling 1.2% to $102.35 per barrel and U.S. benchmark crude dropping 0.8% to $95.31 per barrel.

Currency markets also adjusted to the new political reality. The U.S. dollar weakened to 158.30 Japanese yen, down from 158.69 yen earlier. The euro strengthened to $1.1255 from a previous level of $1.1194.

Carsten Brzeski, global chief of macro at ING Bank, described two potential trajectories for the administration. He suggested Trump could become an

angry duck