Wall St futures jump as Democrats sweep midterms

By Shashwat Chauhan and Utkarsh Hathi

Nov 4 (Reuters) - ‌US stock index futures ​rallied ​on Wednesday after Democrats secured sweeping victories in the midterm elections, with investors betting a divided Washington could limit the scope for sharp policy shifts.

Democrats seized control of both the ‌Senate and House of Representatives, scoring stunning wins in Republican strongholds for the first ⁠time in generations in a broad voter backlash against President Donald Trump.

The prospect of fewer sweeping legislative changes as a result ‌of divided government in Washington provided ‌a lift to large technology companies, though investors were still assessing what Democratic control of Congress could mean for AI regulation.

"Investors could conclude that Washington remains structurally constrained, limiting the prospects for dramatic shifts ​in the economic outlook," said Michael Krautzberger, CIO, for public markets, and Liam Wash, senior US economist at Allianz Global Investors.

Amazon.com jumped about 3%, while Meta Platforms, Nvidia and Alphabet gained over 1% ⁠each.

At 6:24 a.m. ET, Dow E-minis were up 748 points, or 1.44%, and S&P 500 E-minis were up 79 points, or 1.04%. Nasdaq 100 ​E-minis were up 263 points, or 0.93%. The dollar weakened against most currencies and yields on long-dated Treasuries moved lower.

Trump acknowledged that the US-Israeli war on Iran ​played a role in his party's defeat in the elections.

Elon ‌Musk-led SpaceX and Tesla lagged, down over 4% each. Musk had spent heavily backing Republicans in Texas.

AI TRADE IN FOCUS

The AI trade will be in focus after ⁠Democrats made gains in key data-center states including Texas and Georgia, where public opposition to the industry's rapid expansion has been growing.

"Uncertainty is likely to persist in the short term, whilst negotiations between the tech giants and the new local ⁠authorities lead to potential agreements," said Nabil Milali, a portfolio manager at Edmond de Rothschild Asset Management.

Shares of data center-related ​companies dropped in premarket trading, with IREN, Hut 8 and Applied Digital all trading lower.

The AI trade has come pressure recently as investors grow wary of Big Tech's soaring AI spending and little evidence of adequate returns. The tech-heavy Nasdaq-100 ‌index confirmed it had entered a technical correction on Monday.

Shares of solar companies were among the top gainers, with SolarEdge Technologies up 1.7%, First Solar 8.3% and ‌Canadian Solar 8.9%.

Meanwhile, AMD jumped 6.3% after the chipmaker forecast faster-than-expected 2027 growth as its data-center sales surge and ⁠its multibillion-dollar challenge to Nvidia gathers pace.

The ‌broader semiconductor sector also gained, with ​Micron Technology, Broadcom and Marvell Technology rising 1%-2%.

(Reporting by Shashwat Chauhan and Utkarsh Hathi in Bengaluru; Additional reporting by Jiaxing Li and Medha Singh; Editing by Mrigank Dhaniwala and ‌Saumyadeb Chakrabarty)

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