U.S. stock futures moved in both directions overnight as investors digested Tuesday's midterm election results. Futures on the Dow Jones Industrial Average, the S&P 500 and the Nasdaq 100 initially fell after it became clear Democrats would win control of both the House and the Senate, before reversing and turning higher by early Wednesday morning. As of around 5:25 a.m. Eastern time, Nasdaq 100 futures were up 0.89 percent, S&P 500 futures were up 0.90 percent, and Dow futures were up 1.28 percent.
The yield on the 10-year U.S. Treasury note fell to 4.92 percent, a move consistent with investors adjusting their expectations for fiscal policy and interest rates under a divided Congress. In premarket trading, shares of large technology and artificial intelligence companies rose, along with renewable energy and healthcare stocks, as investors weighed the possibility of policy shifts under the new Congress. Defense stocks, by contrast, declined.
Oil prices remained volatile overnight as traders also tracked developments in the Middle East, where mediation efforts led by Qatar aimed to prevent further escalation of the conflict involving Iran. During Tuesday's regular session, before the election results were clear, the Nasdaq had already closed up 0.83 percent, supported by gains in technology shares, while the Dow slipped slightly and the S&P 500 edged higher.
Overseas, Asian markets were mixed Wednesday. Mainland Chinese shares rose, with the Shenzhen Component up over 3 percent, while Japan's Nikkei 225 fell more than 1 percent and the broader Topix index also declined, reflecting a varied regional reaction to the overnight developments out of Washington and the Gulf.
Watch how Wall Street trades once the opening bell rings in New York, and whether the overnight reversal in futures holds through the full session as more midterm results are finalized.
Did the stock market react negatively to the Democratic sweep?
Futures initially dipped but reversed to trade higher ahead of Wednesday's open as investors reassessed the implications.
Why did Treasury yields fall?
Falling yields reflected investors adjusting expectations for fiscal and interest rate policy under a divided Congress.