Global stocks recovered from overnight lows on Wednesday, November 4, while the dollar weakened, after Democrats won control of both the Senate and the House in the US midterm elections, Reuters reported. AI stocks in Asia led the initial sell-off as investors worried that the sector’s rapid growth could face tougher regulatory scrutiny from a Democratic Congress, and US stock futures fell as much as 2% overnight.
By the European morning, MSCI’s All-World index was up 0.13% and the STOXX 600 had gained 0.5%. Tesla and SpaceX shares were down about 4.5% to 5% on Tradegate, against declines of 0.3% to 0.9% for other Big Tech names. Bonds gained: the 10-year Treasury yield fell 3 basis points to 4.92% after touching 4.89%. The euro rose 0.4% to $1.133, the pound added 0.5% to $1.348 and Brent crude slipped 0.4% to $103.17 a barrel.
“Bonds are coming out as the clear winner as markets put the AI trade on the chopping block and embrace the higher possibility that further tax cuts are put on ice and government spending slows,” said Prashant Newnaha of TD Securities. Kathleen Brooks of XTB said investors will now move from trading election uncertainty to trading what the result means for policy.
Bitcoin, which tracked the overnight slide in tech futures, recovered toward $78,000 alongside equities as the outcome became clear.
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Sources:
Reuters via Investing.com: Stocks rally, dollar dips after Democrats’ midterm sweep
CoinDesk: Bitcoin surges to $78,300 as midterm election uncertainty fades
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