Dow Futures Up About 2% After Democrats Win House and Senate, With AI-Linked Shares Lagging

Democrats took control of the House and the Senate in Tuesday's midterms, and Wall Street's futures market has moved higher on the news. These are premarket indications, not opening prices.

Dow futures were up roughly 2%, or 1,083 points, S&P 500 futures were up about 1.1% to 1.2%, and Nasdaq-100 futures were up about 0.4%. Futures swung sharply overnight. Earlier in the morning, S&P futures reversed overnight declines, and Nasdaq futures were marginally lower at 8 a.m. ET.

Trump says he'll accept it, then posts a veto hat

Trump told the New York Times he was "absolutely willing" to accept the results. He told the Wall Street Journal that he and Republicans would work with Democrats.

In a phone interview with Fox News, he said: "I think the Democrats did a good job. I really do. They fought hard." He also pinned the loss on fuel costs rather than the war itself: "I don't think it's the war. I think it's a gasoline price. People agree with what I'm doing on Iran, but they really probably weren't willing to do the short-term consequence of paying more for gasoline."

Then came the Truth Social post Tuesday night: a photo of a red baseball cap with "VETO" stitched on the front. Days earlier Trump had said that if Democrats won, "I guess I'll become Mr. Veto," and predicted that after a month or two of vetoes, "you make a deal."

A White House official told Breitbart News the mood was "defiant" and that Trump's "resolve to stop the Radical Left is only going to become stronger." The official said "President Trump was not on the ballot."

Where the premarket money is moving

The winners are mostly the beaten-down and the defensive. Health insurers and hospital operators rose in early trading: Molina Healthcare up 6.3%, Centene up 4.7%, UnitedHealth up 1.4% and HCA Healthcare up 1.44%. The Invesco Solar ETF jumped 5%, and wind energy stocks rose. Walmart added 2% and Bank of America 1.9%.

The losers are tied to artificial intelligence and to Elon Musk. Tesla was down 7% and SpaceX down 5% in premarket trading. Oracle and CoreWeave were also lower. Nvidia and Micron fell more than 1%. Defense stocks were largely in retreat on the possibility that the Iran war gets dialed back.

The AI worry has a specific source. Texas Democrat Gina Hinojosa won the governor's race after pledging an immediate moratorium on data center construction in the state, a major hub for the buildout.

Rates, oil and the dollar

The 10-year Treasury yield fell about 5 to 6 basis points to roughly 4.91%. The dollar index dropped about 0.3% to 0.6%, depending on the report. Gold rose about 3% to around $4,053 an ounce.

Oil fell sharply. Reports put Brent crude down between 1.2% and 2.67%, with prices ranging from $100.87 to $102.35 a barrel at different points in the morning. U.S. benchmark crude was around $94 to $95 a barrel.

Europe rallied. London's FTSE 100 was up nearly 2% at about 10,845. Eurozone inflation hit 4% in October, the highest in three years, up from 3.8% in September, according to Eurostat's flash estimate.

What the strategists are saying

The bullish case is gridlock. "The markets like gridlock. They don't like a party with too much power," said Andrew Slimmon of Morgan Stanley Investment Management. Jay Woods of Freedom Capital Markets said gridlock is historically good for stocks. Ned Davis Research found the S&P 500 rose through year-end in five of eight midterm cycles since 1930 when the president's party lost the House.

The skeptics are focused on AI. Russ Mould of AJ Bell said "the prospect of red tape could put the brakes" on the AI trade. Michael Field of Morningstar said investors are "understandably concerned" about regulation, but are overlooking how easing conflict in the Middle East could lower inflation and rates, which would help tech valuations.

Others say not much has changed. Stephen Brown of Capital Economics said the near-term policy outlook is little altered because Democrats still lack a filibuster-proof Senate majority and Trump holds the veto. ING's Carsten Brzeski framed two possibilities: an "angry duck" who could restart fights over tariffs and NATO spending, or a "tame duck" who focuses on ending two wars. Trump keeps executive authority over defense, foreign policy and, in some cases, trade.

Matthew Ryan of Ebury said a Democratic Congress is likely to rein in Trump's fiscally expansionary agenda, easing deficit concerns and "taking some of the heat out of the Treasury sell-off."

Also on today's calendar

S&P and ISM activity indexes and ADP's private payrolls report are due today. Earnings from Arm, Qualcomm, Novo Nordisk and Uber are also on deck. McDonald's already reported: U.S. comparable sales fell 0.2%, narrower than the 0.5% drop expected, and global same-store sales rose 1.5%. CVS announced a plan to split into two companies, separating pharmacy from insurance.

The near-term test is whether the futures indications hold once actual orders meet the market. The longer test is Texas, where Hinojosa's data center moratorium pledge is the first concrete policy threat to the AI buildout that traders are now pricing.