US stock futures traded mixed on Thursday as investors assessed the results of the midterm elections, developments in the semiconductor industry and the outlook for monetary policy.
The Democratic Party’s victory in both chambers of Congress prompted market participants to reconsider the prospects for US trade policy, artificial intelligence regulation and the conflict with Iran.
Technology stocks came under pressure, with Qualcomm (NASDAQ:QCOM) declining more than 8% in after-hours trading following weaker-than-expected smartphone chip sales. Other semiconductor companies also recorded losses amid concerns about potential changes to AI-related investment and regulation.
Oil prices stabilised near $95 per barrel after declining sharply on Wednesday, while investors awaited US employment data and the Bank of England’s interest rate decision.
US Stock Futures Show Diverging Movements
At 03:03 ET (08:03 GMT), futures linked to the S&P 500 were down 15 points, or 0.2%.
Nasdaq 100 futures declined 289 points, equivalent to 1.0%, while Dow Jones futures increased 169 points, or 0.3%.
The mixed performance followed gains across Wall Street on Wednesday as investors considered the implications of the US midterm elections.
Democrats secured control of both the House of Representatives and the Senate, with the new congressional composition taking effect in January.
Some market analysts suggested that a Democratic-controlled Congress alongside Republican President Donald Trump could create legislative constraints on major policy changes.
Such an arrangement could influence the outlook for trade measures, fiscal policy and financial market regulation.
Midterm Results Prompt Reassessment of US Economic Policy
The election results led investors to evaluate the likelihood of additional tariffs, changes in government spending and potential adjustments to US foreign policy.
Analysts at Yardeni Research suggested that the new political balance could reduce the probability of further inflationary fiscal measures and encourage a diplomatic resolution to the conflict with Iran.
They also noted that slower investment in artificial intelligence infrastructure could have implications for corporate cash flow and bond markets.
According to the analysts, reduced AI-related capital expenditure could increase profits and free cash flow at major technology companies.
A decline in borrowing to finance AI infrastructure could also limit upward pressure on bond yields.
“Financial markets interpreted the Democratic electoral gains positively,” Yardeni Research analysts said.
