Global stocks slid and Nasdaq futures briefly fell more than 2 percent as investors bet that a Democratic Congress will bring tougher scrutiny of the artificial intelligence boom.
Markets woke up to a new Washington on Wednesday and did not like what they saw, at least at first. As Democrats captured both the House and the Senate, futures on the Nasdaq 100 skidded more than 2 percent overnight before cutting their losses to trade about 0.5 percent lower. S&P 500 futures were down about 0.35 percent, and European stock futures, which had dropped 1.5 percent at one point, were off about 0.4 percent.
Gold rose 2.4 percent as the dollar weakened after the midterms, while oil swung in a narrow range as traders weighed peace talks over Iran and Ukraine against the risk of new attacks on supply.
Gold was the clear winner of the morning after the election. Spot gold climbed 2.4 percent to about $4,022 an ounce as the dollar slid to a one-month low and investors sought safe havens. Silver also rose. A weaker dollar makes metals priced in dollars cheaper for buyers using other currencies.
The dollar fell broadly after Democrats won Congress, with the yen and the Swiss franc posting the biggest gains and the euro climbing to about $1.125.
The dollar fell against almost every major currency on Wednesday as investors reassessed the political outlook in Washington. The dollar index, which measures the currency against a basket of peers, dropped as much as 0.6 percent at one point before trading about 0.35 to 0.4 percent lower, near 101.3. That was its weakest level since late September.
The 10-year Treasury yield fell to about 4.9 percent after Democrats won Congress, as traders wagered that gridlock would cap new spending and tax cuts and reduce bond supply.
Government bonds rallied on Wednesday as investors digested the Democratic sweep. The yield on the benchmark 10-year Treasury note fell as much as 6 basis points to about 4.906 percent before recovering slightly to near 4.93 percent. The two-year yield, which is more sensitive to interest-rate expectations, fell about 3.5 basis points overnight and was last near 4.60 percent.
