Markets Swing as Midterm Sweep Jolts AI Bets, Then Futures Rebound

Global stocks slumped and the dollar softened on Wednesday as Democrats scored a decisive win in the U.S. midterm elections, fueling fears the blue sweep could disrupt the data-center buildout behind the AI trade, Reuters reported.

Early on Wednesday, S&P 500 futures slid 0.6 percent and Nasdaq futures fell more than 2 percent before cutting losses to down 0.8 percent, while the U.S. 10-year Treasury yield fell 6 basis points to 4.906 percent. In Asia, chipmakers Samsung, SK Hynix and TSMC slid sharply, and SoftBank led Japan's Nikkei 3 percent lower to an over five-month trough.

Bonds benefited as investors sought safety, and cryptocurrencies fell at the prospect of stronger regulation. Data-center names IREN, Hut 8 and Applied Digital traded lower in premarket trading.

Later on Wednesday, futures reversed course: at 4:22 a.m. ET, Dow E-minis were up 436 points (0.84 percent), S&P 500 E-minis up 26.75 points (0.35 percent), and Nasdaq-100 E-minis up 44.75 points (0.16 percent), after President Donald Trump accepted the results and acknowledged that the war in Iran played a role in Republican losses.

Morningstar and Dow Jones later reported Nasdaq futures up 1.1 percent, S&P 500 futures up 1.1 percent and Dow futures up 1.5 percent, with Shanghai's Composite up 2.2 percent and Hong Kong's Hang Seng up 1.45 percent. Analysts said both halves of the day mattered: the early sell-off reflected fears of tighter regulation and gridlock, while the rebound reflected a view that divided government keeps both parties in check.