Democrats take Congress, lifting European stocks and bonds after early US tech futures slump

Democrats take both chambers of Congress

Democrats won control of the House of Representatives and the Senate in the US midterm elections, a result some coverage calls a 'blue wave' against Republicans led by Donald Trump. Trump keeps the White House but loses the congressional majority he needed for his economic agenda, and he moved quickly to say he would work with Democrats. Before the vote, polls and independent analysts cited by Reuters favored Democrats for the House, while the Senate race was still uncertain. Contests for state governments were also closely watched.

Early selloff in tech futures

Investors first priced in the risk of tighter oversight of artificial intelligence, large technology companies and data center construction. In early trade on Wednesday, 4 November, Nasdaq futures fell more than 2% and S&P 500 futures dropped about 1.2%. Japan's Nikkei fell more than 3% after returning from a holiday, and South Korea's Kospi lost 1.6%. Charu Chanana, head of investment strategy at Saxo in Singapore, told Reuters that the change arrives as investors already question high valuations and heavy AI spending.

Recovery in Europe and Athens

European shares recovered after the early drop, with the STOXX 600 up 0.5% at 08:16 GMT, following a fall in futures of as much as 1.4%. Bank shares rose more than 2%, while clean energy names led the gains with Orsted up 7%, Vestas up 5% and Nordex up 4.7%. Novo Nordisk gained 4.6% after reporting third-quarter results above expectations and lifting its annual sales and earnings forecasts. In Athens, the general index was up about 1.4% at one point, with Alpha Bank, Eurobank and PPC among the largest gainers and AKTOR, OTE and LAMDA Development the weakest.

Orsted7%

Vestas5%

Nordex4.7%

Novo Nordisk4.6%

Orsted

7 %

Vestas

5 %

Nordex

4.7 %

Novo Nordisk

4.6 %

Data from the article text

Bonds, the dollar and oil

Government bonds rallied as the prospect of a divided Washington was seen limiting new tax cuts and spending. The US 10-year yield fell 5-6 basis points to near 4.90%, and the 2-year fell to 4.55%, while the dollar weakened 0.5% against the euro. Florian Ielpo of Lombard Odier Investment Managers said the deadlock could reduce the chance of another large fiscal expansion, which could ultimately support stocks. On Tuesday, 3 November, the 10-year yield had closed at 4.95%, and Brent crude fell 1.1% to $103.60 a barrel, according to the Wall Street Journal, as traders weighed talks to end the wars in Iran and Ukraine.

2-year Treasury4.61%

10-year Treasury4.95%

30-year Treasury5.32%

2-year Treasury

4.61 %

10-year Treasury

4.95 %

30-year Treasury

5.32 %

Data from the article text

Athens results, calendar and Iran

Attention in Athens also turns to nine-month results, with National Bank, Coca-Cola HBC and Lamda Development reporting on 4 November and Metlen, Titan Cement and Bank of Cyprus on Thursday, 5 November. OLP reported on Tuesday, 3 November, that its nine-month net profit fell 21.5% to 59.6 million euros and its turnover dropped 8.2% to 178.8 million euros. BriQ shares trade without the right to its 0.10 euro interim dividend from 4 November. Quest Holdings is preparing a separate listing for its IT subsidiary Uni System after the collapse of the planned sale of ACS Couriers. Some market commentary also mentions circulating scenarios of an imminent military strike on Iran.