US stock futures dropped as investors braced for the outcome of the midterm elections and assessed earnings results from technology stocks at the center of the artificial intelligence trade.
Contracts on the S&P 500 Index fell 0.3% at 7:27 p.m. in New York. Futures on the Nasdaq 100 Index lost 0.6%, erasing earlier gains. Contracts declined as Decision Desk HQ said on X that Democratic incumbent Jon Ossoff is projected to win the Senate race in Georgia, in an early blow to Republicans.
Investors worldwide are looking to US midterm elections results, as the outcome may influence asset prices in every corner of the stock market. Wall Street expects stocks to fall if Democrats regain control of both houses of Congress. Polls closed in Georgia and South Carolina, both states with critical Senate races.
“A Democratic sweep of Congress would probably be the least desirable outcome for tech stocks and risk assets more broadly,” said Tim Waterer, chief market analyst at KCM Trade in Sydney. “A split Congress, or an unexpected Republican hold, would offer more policy continuity and prove less disruptive.”
Still, from a broader lens, history has generally favored stocks following midterm elections. Large-cap equities have gained about 15% on a market-cap-weighted basis and 16% on an equal-weighted basis in the six months after midterms since 1982, data compiled by Morgan Stanley show. Both measures have advanced roughly 22% over the subsequent year.