Global markets sold off as early results of the US Congressional midterm elections pointed to a Democratic gain. US index futures fell sharply and Asian risk appetite declined. The dollar index slipped 0.5 percent to 101.3, while EUR/USD rose 0.6 percent to 1.1250.
Election results weigh on sentiment
Early results indicated Democrats could take control of both chambers of Congress. Analysts said that could constrain Trump administration policies such as tax cuts and expansionary fiscal policy. It could also tighten regulatory scrutiny of technology and AI companies.
Apple shares fell 1.9 percent after the company warned of higher memory chip costs weighing on gross margin. The S&P 500 nonetheless rose 0.36 percent, while the Nasdaq gained 0.83 percent. The Dow Jones slipped 0.38 percent.
Europe, rates and oil
European indices closed lower. The FTSE 100 fell 1.14 percent, the DAX 40 lost 0.45 percent and the CAC 40 dropped 0.34 percent. Lufthansa rose 4 percent after raising expectations for next year’s fares, and its third-quarter revenue reached 12.2 billion euros.
Adidas fell 2.3 percent after UBS downgraded its rating from neutral to sell. MTU lost 3.1 percent after Bank of America withdrew its recommendation. Bayer gained 4.5 percent on the day.
Fed pricing moved toward tightening. Markets put an 80 percent probability on a 25 basis point rate hike at the December meeting, on the view that strong activity and inflationary pressure keep hike odds high. The US 10-year yield fell 7 basis points to 4.90 percent. January-futures Brent crude dropped 0.7 percent to 102.8 dollars a barrel, while gold rose 0.9 percent to 3954 dollars an ounce.
Related: Asian stocks mixed as US midterm results awaited · Bitcoin edges up as US stocks shrug off midterm jitters
Data: Swissquote
