Democrats won control of both the House and Senate in Tuesday’s US midterm elections, pulling down European stock index futures, Asian tech shares and the dollar while lifting Treasuries as investors braced for tighter AI regulation and tougher oversight of President Donald Trump’s policies. Bitcoin, which had dropped below $76,000 during the initial election night selloff, rebounded to erase all of its midterm losses.
The sweep makes Trump the eighth US president since 1954 to lose both chambers of Congress to Democrats, following projected Senate flips including James Talarico in Texas and Annie Andrews in South Carolina alongside Democratic wins in Kansas, Georgia, Virginia and New Hampshire. Earlier in the night, S&P 500 futures slid 1.25% below 7,500 and Nasdaq 100 contracts dropped more than 2% as incoming returns pointed to a full turnover on Capitol Hill.
UBS strategists said markets turned risk off on the prospect of “more friction around AI/data center investments, as well as more gridlock and negotiation/ bargaining around the debt ceiling and fiscal policy,” with Trump having vowed to become “Mr. Veto” under a Democratic Congress. Still, JPMorgan called AI regulation fears overstated because Trump would not sign bills limiting the sector, describing any post-election dip in AI shares as a buying opportunity with spending projected to remain strong through 2028.