US stock index futures are falling together as Democrats consolidate their lead in the midterm election count. As of 10:57 a.m. Korea time on the 4th, Nasdaq futures had plunged 1.9%, while S&P 500 futures and Dow futures were down 0.8% and 0.4%, respectively.
Jamie Hanna, deputy head of investments at VanEck Associates, told Bloomberg, “The market is reacting sensitively as the US midterm results come in,” adding, “We expect S&P 500 futures to remain volatile while the results are being counted.”
In the count that began on the 3rd (local time), Democrats are rapidly gaining seats in both the Senate and the House. On the prediction market platform Kalshi, the probability of a so-called blue wave, in which Democrats win both chambers, jumped from 72% to 86% after the count began.
Charu Chanana, chief strategist at Saxo Markets, also said, “Investors are struggling to digest the midterm results amid an already unsettled tech stock market,” adding, “The market seems to have already priced in the possibility of a Democratic landslide.”
The weakness is interpreted as reflecting wariness that, if a blue wave becomes reality, regulation of the artificial intelligence (AI) sector, which has led the stock market's gains, could tighten further. In particular, there is speculation that construction of AI data centers could be disrupted.
Turnquist of LPL Financial predicted, “The impact of the midterm results will be even more pronounced for mega-cap tech stocks and hyperscalers.” He said that because market money is concentrated in large AI-related stocks, a fall in those stocks could drag down major stock indexes as well.
He added, however, that even if big tech stocks are sold after the election, it does not mean the AI investment thesis itself has fundamentally changed. If anything, he explained, it could be an opportunity to buy at lower prices.