Nov 4 (Reuters) – Democrats notched early Senate wins, fuelling bets they could wrest control of the chamber from President Donald Trump’s Republicans and raising the prospect of a blue sweep in the US midterm election, though the final outcome remained uncertain.
The market reaction was swift, with US stock futures declining sharply and AI stocks down in Asia, while Treasury yields dipped, dragging the dollar lower.
Here are some comments from analysts:
CHRISTOPHER HODGE, CHIEF US ECONOMIST, NATIXIS, NEW YORK:
“The wave looks to be underway; the questions are how high, how wide, and what will the fallout be.
“Economically, we still don’t think the direct implications are huge.
“That doesn’t mean that tonight won’t have big implications. For one thing, Trump doesn’t like bad news and seeing as how he personally selected many of the struggling candidates, he might be looking to change the narrative sooner rather than later.
“A ‘short and intense’ campaign in Iran has been rumoured … and that would certainly be a distraction.
“Presidents typically start making changes after midterms anyway and Trump could be looking for scapegoats. Secretary of Defense Hegseth comes to mind as a possibility. Bessent is another one to watch…he may be looking for a graceful exit if he views the administration as a sinking ship.”
JAKE DOLLARHIDE, CHIEF EXECUTIVE, LONGBOW ASSET MANAGEMENT, TULSA, OKLAHOMA:
“A Democratic sweep of Congress would put pressure on tech and potentially bring regulatory pressure on everything AI and possibly slow down the wild, wild west growth figures that we see daily and often take for granted.
“While Democrats rule Silicon Valley, tech CEOs are rooting for Republican victories tonight.
“Musk was the Hail Mary for Republicans leading down to the wire. Unfortunately, his large infusion of cash to back red states could not overcome higher utility bills, prices at the grocery store and prices at the gas pump.”
TAPAS STRICKLAND, CHIEF MARKET STRATEGIST AT MOOMOO ANZ, SYDNEY:
“I think the fear is that the pace of the AI infrastructure rollout could slow, potentially quite markedly in Texas, as they start to digest exactly what mandate they might have in terms of AI.
“Going into this, we were talking about the importance of the Texas and Georgia governor races. Those two states effectively make up about a third of all AI data centre spend and projects. If both of those go Democrat at the governor level, the potential for it to slow is very much there, and that would obviously cascade through to the rest of the AI sector.”
