Overnight Developments
Democrats flip both chambers of Congress in midterm blue wave — CNBC
Democrats flipped both the House and the Senate. As of early Wednesday, the CNBC Election Desk projected them to win at least 250 House seats and at least 54 Senate seats; Alaska and Mississippi are the only Senate races still uncalled. The majorities give Democrats subpoena power and a shot at a binding War Powers Resolution on Iran. Iran’s parliament speaker reacted on X that Americans “said NO TO WAR.”
Futures fell as results came in, with AI shares leading the overnight decline on fears that Democrats would slow the data-center buildout. The 10-year yield slipped 3 bp to about 4.92% as money moved into bonds. Futures then reversed and are now solidly higher. Affected sectors: Broad market, AI/Data centers, Defense, Energy, Rates
SpaceX and Tesla slide as Musk’s $474M election bet backfires — CNBC
Democrats won both the Texas Senate seat (Talarico over Paxton) and the governor’s mansion (Hinojosa over Abbott). That is a direct hit to Musk, who put $224 million into Texas alone. Dan Ives called Texas the “biggest worry” of the night for the AI trade, since that is where around 25%–30% of planned data-center capacity is set to come from. Tesla is down about 6% pre-market from Tuesday’s close. Big Tech is holding up: Amazon, Alphabet and Meta are all higher. Affected sectors: AI infrastructure, EV/Autos, Space
Euro zone inflation hits 4%, a three-year high — CNBC
October flash CPI rose to 4.0% from 3.8%, in line with the Reuters poll. Energy inflation climbed to 20.8% on the back of the Iran war. Markets now price a more than 72% chance that the ECB hikes in December. The euro is up 0.6% against the dollar. Affected sectors: Rates, FX, Energy
Futures & Pre-Market
| Index | Futures | Change |
|---|---|---|
| S&P 500 | 7,680 | +1.1% |
| NASDAQ | 28,521 | +0.8% |
| DOW | 52,741 | +1.6% |
Changes are against Tuesday’s settle, recomputed from daily bars at about 07:15 ET. The ETFs agree: DIA is up 1.5% pre-market, SPY 0.8% and QQQ 0.4%.
The Dow is leading and the Nasdaq is lagging, which is the election trade in one line. Investors are rotating toward the broad market and away from the AI-infrastructure names that the Texas results put at risk. WTI is down about 1% to around $95 and Brent about 1% to around $102.
Watchlist Movers
- SMCI +3.7% pre-market, after jumping more than 9% after hours on Tuesday. EPS and revenue beat estimates, and the company guided fiscal 2027 net sales to $72–82B against a $69.17B LSEG consensus. More than half of the after-hours gain has already faded.
- AMZN +2.5%, NNE +2.8%, NKE +1.9%, COST +1.4%. Gains are broad-based, with no company-specific news.
- INTC -2.3%, UNH -1.1%, RKLB -1.1%. These are the watchlist laggards in an otherwise green tape.
International Markets
Asia was mixed. Japan, returning from Tuesday’s Culture Day holiday, saw the Nikkei fall 1.4%, while the Hang Seng rose 1.7% and Shanghai 2.2%. Europe is firmly risk-on: the FTSE is up 1.3%, the DAX 1.5% and the Euro Stoxx 50 1.8%.
What to Watch at Open
Stock futures reversed an overnight election sell-off and now point to a 1.1% gain for the S&P 500 and a 1.6% gain for the Dow after Democrats flipped both chambers of Congress. Watch whether the AI and data-center names keep lagging, since the Texas results put about a quarter of planned U.S. capacity under a Democratic governor.
This alert is for informational purposes only and does not constitute financial advice.