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Market Quick Take - Democrats take control of House and Senate - 4 November 2026
Macro 3 minutes to read
Market drivers and catalysts
- Macro: Massive blue wave mid-term election result sees Democrats take control of House and Senate
- Equities: US technology stocks rebounded, European shares declined, Asian markets came under pressure as US midterm results raised political uncertainty.
- Volatility: One-day volatility jumped into the results while front VIX futures rose overnight
- Digital Assets: Crypto miners rallied with chip stocks while legislation returned to focus after the vote
- Commodities: Historic Democratic sweep lifts precious metals as copper and oil reassess policy risks
- Fixed Income: Yields ease lower on US mid-term results. Treasury QRA in focus today.
- Currencies: USD weakens as Dems set to take control of Congress. SEK strong ahead of Riksbank.
Macro
- In a historic political flip, Democrats swept to power in both the House and Senate, overturning long-entrenched Republican strongholds as voter frustration over the cost of living and the war in Iran delivered a resounding rebuke of President Trump. The result redraws a deeply polarised electoral map, dramatically curtails Trump's political freedom and marks a potential turning point in Washington, with Democrats now positioned to challenge his agenda during the remainder of his second term.
- US job openings rose unexpectedly to 7.52 million in September, a four-month high, while quits climbed to 3.37 million and layoffs fell to their lowest in over a year. Factory orders rose 1.8% in September against 1.2% expected.
- Iran described Washington's latest response in peace talks as unsatisfactory, while recent limited US strikes on Iranian missile systems were not read as an immediate escalation. Tehran and Washington are reviewing fresh proposals from mediators on how to resolve their differences, while Trump told the Financial Times the US has no immediate plans to strike Iran, saying "we're locked and loaded if we need to go, but there may be no reason for it".
- Today brings the Treasury's quarterly refunding announcement, the ISM services index and ADP employment, with Qualcomm, Arm, Uber, McDonald's and Novo Nordisk reporting. The Bank of England decides on Thursday and US payrolls follow on Friday.
More in our Macro Analysis & Macroeconomic News
Macro calendar highlights (times in GMT)
- 0830 – Sweden Rate Decision
- 1000 – Eurozone Oct. CPI
- 1200 – US Oct. Mortgage Applications
- 1315 – US Oct. ADP Employment Change
- 1330 – US Treasury Quarterly Refunding Announcement
- 1500 – US Oct. ISM Services
- 1530 – EIA's Weekly Crude and Fuel Stocks
Earnings events
- Wednesday: McDonald’s, Qualcomm, Novo Nordisk, Uber, McKesson, CVS Health, Datadog, Applovin
- Thursday: ConocoPhillips, Deutsche Telekom, Canadian Natural Resources, Parker-Hannifin, Southern Company, Cloudflare, Duke Energy, Airbnb, Monster Beverage, Lumentum
- Friday: Enbridge, Moderna
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
- USA: The S&P 500 gained 0.4%, the Nasdaq 100 rose 0.7%, while the Dow fell 0.4% on Tuesday, as technology stocks recovered despite broader market weakness. Nvidia climbed 2.3%, reclaiming its position as the world's most valuable company, while Apple declined 1.9% after warning that higher memory costs would squeeze profit margins. Shopify dropped 8.7% after quarterly revenue and transaction volumes missed expectations, despite strong underlying growth. After hours, Arista Networks surged more than 8% on strong earnings, while the US midterms delivered major Democratic gains, with projections pointing to control of both chambers of Congress, potentially constraining Trump's legislative agenda and increasing scrutiny of technology, taxation and government spending.
- Europe: European equities declined on Tuesday, with the Stoxx 600 falling 0.6%, Germany's DAX losing 0.5% and the UK's FTSE 100 dropping 1.1%, as concerns over artificial intelligence valuations and geopolitical uncertainty weighed on sentiment. HSBC slipped 2% amid banking-sector weakness ahead of Thursday's Bank of England decision, while ASML fell 1.6% as semiconductor selling continued. Zalando lost more than 6% after disappointing margins, highlighting pressure on consumer-facing businesses despite continued sales growth. Bayer offered some relief, gaining 3.6% after raising its full-year profit outlook, while investors also monitored developments in US-Iran negotiations and the implications of the American midterms.
- Asia: Asian equities came under renewed pressure on Wednesday, with Japan's Nikkei falling around 1.5% and South Korea's Kospi reversing an early rebound of more than 2% as US election results unsettled technology stocks. The prospect of Democratic control of Congress raised concerns about tighter oversight of artificial intelligence and potential restrictions on data-centre development, weighing on Samsung Electronics and SK Hynix after Tuesday's sharp declines. SoftBank also suffered heavy selling as Japan reopened following Tuesday's Culture Day holiday. Despite strong overnight earnings from AMD, investors remained focused on whether political developments and elevated AI valuations could challenge the region's semiconductor-driven rally.
More in our Equity Trading - Stock Market Analysis & News
Volatility
VIX 20.83 | VIX FUTURES: 21.100 (Nov) | TERM STRUCTURE: FLAT | SKEW: ELEVATED (150.01) | MARKET REGIME: NEUTRAL / CHOP | AS OF ~05:00 CET
- Traders paid up for one day of protection and sold the rest of the curve into the vote. VIX1D jumped almost 30% to 23.22, above a VIX that eased to 20.83, while nine-day, three-month, Nasdaq and small-cap vol all slipped. Then the results arrived overnight. With Democrats projected to take the Senate, the front VIX future rose 6% to 21.10, reopening a gap over December that had narrowed at Tuesday's settle.
- That puts the November hump back in play, covering the 9 December Fed. Options priced about 1.14% for today, a move futures had largely made before the open. SKEW and dispersion eased and MOVE held at 100, so rates vol did not confirm.
More in our Options Trading - Stock Market Analysis & News
Digital Assets
BITCOIN ~76,407 -1.19% | ETHEREUM ~2,246 -1.10% | IBIT 44.05 +1.61% | ETHA 51.78 +2.05% | AS OF ~05:00 CET
- Crypto equities outran the tokens on Tuesday as the AI-compute trade rebounded from Monday's analyst cuts. Riot and Cipher each gained more than 18% after Keefe Bruyette had warned of a drought in new data-centre leases. Investors are trading the miners as data-centre landlords rather than bitcoin proxies. Strategy rose 3.72% after spending more on STRC buybacks than on bitcoin last week.
- Bitcoin slipped back to about USD 76,400 overnight on the Senate result, and a Democratic Senate from January changes the arithmetic for the CLARITY Act, stalled since September. Bitcoin ETFs lost about USD 116m on Tuesday, a third straight outflow, most of it from IBIT. Circle, Hut 8 and Riot report today.
Commodities
- US midterms response: The Democrats' historic election victory has triggered an initial reassessment of US fiscal, trade and foreign policy, with precious metals emerging as the clear winners.
- Precious metals: Gold and silver have rallied, supported by a softer dollar and lower Treasury yields amid expectations that a Democrat-controlled Congress could constrain Trump's fiscal agenda and limit further, increasingly unaffordable fiscal expansion. Short covering has added momentum after gold reclaimed key resistance at USD 3,970, potentially setting up a challenge of the downtrend in place since August, currently around USD 4,035.
- Copper: Prices trade lower but off their lows as traders reassess AI-related demand prospects and whether Trump's defeat, combined with voters' focus on affordability, has reduced the likelihood of US import tariffs on refined copper. Such a shift could ease short-term supply distortions and potentially release US-held inventories back onto the global market, while longer-term supply constraints remain supportive.
- Energy: Oil prices have staged a modest rebound following a two-day slump as traders weigh conflicting signals over the prospects for US-Iran peace talks. Adding to the uncertainty is how Trump may respond on the foreign policy front, where his executive powers remain considerable despite a resounding electoral rebuke driven by voter frustration over the cost of living and the war in Iran. With his domestic agenda now facing greater congressional resistance, the risk of a more assertive stance abroad cannot be ignored, keeping geopolitical uncertainty firmly in focus.
More in our Commodity News, Analysis & Commentary
Fixed Income
- US Treasury yields dropped back a few basis points all along the yield curve on the US election result, perhaps as US Treasury Secretary Bessent has recently said that, if the Democrats were to win, he will use the lame duck period before the newly elected Congress takes power to undertake significant fiscal consolidation.
- Today sees the US Treasury’s Quarterly Refunding Announcement, which some expect might see US Treasury Secretary Bessent announcing a cancellation of further 20-year treasury auctions and possibly changes to the size of 30-year auctions.
Currencies
- The US dollar was weaker in the wake of the US election result, though marginally off its lows as European trading gets under way Wednesday. EURUSD trades 1.1242 after a 1.1263 high and up from below 1.1200 close on Tuesday.
- EURSEK is challenging the 200-day moving average near 10.95 ahead of this morning’s Riksbank meeting, which is expected to deliver a rate hike, with guidance on further moves in focus amidst signs of a strengthening Swedish economy.
More on currencies in our dedicated section: Forex Trading News & Analysis