Nasdaq Futures Indicate 2% Drop, Nikkei Falls Over 4% as Democrats Lead Midterm Count

Since Tuesday evening's futures reversal as prediction markets leaned toward Democratic control of Congress, the selloff has widened across Asia and into the dollar and bond markets. U.S. regular trading has not opened; the numbers below are futures and overseas-market moves heading into the 9:30 a.m. ET open today, Nov. 4.

Futures and Asia extend losses

Nasdaq 100 futures indicated a decline of roughly 2.0% to 2.1% for the New York open. E-mini S&P 500 futures were down about 1.1% to 1.2%. Stoxx Europe 600 futures pointed to a 1.3% drop.

Asia took the heavier hit. Japan's Nikkei 225 fell more than 4%, reaching a five-month low, its weakest level since May. South Korea's Kospi dropped between 3.4% and 3.9% depending on the time of the reading, and Taiwan's Taiex fell 3.2%, on track for its lowest level since late July.

SoftBank, which owns roughly 13% of OpenAI, dropped 9.1%. SK Hynix fell 6.5% and Samsung Electronics lost 5.9%. Those two are the world's largest makers of AI memory chips.

Dollar down, yields lower, bitcoin slips

The dollar fell 0.5% against a basket of trading partners' currencies, to its lowest level in more than a month. The 10-year Treasury yield dropped to about 4.90%, its lowest since early September. The two-year yield fell about 0.06 percentage points to 4.55%.

Bond rallies often signal rising worry about growth. Bitcoin was down 1.2% at 76,893.48, which market participants tied to expectations that more Democratic control would be unfavorable for crypto legislation and adoption.

What the count shows so far

Early tallies had Democrats winning 139 House seats to Republicans' 89, with 218 needed for a majority and many races uncalled. In the Senate, Democrats held 46 seats to Republicans' 36, a count that includes senators not up this year, with 18 seats undecided.

Democrats flipped Senate seats in South Carolina and North Carolina and held seats in Georgia and New Hampshire, according to Dow Jones. Republicans are increasingly pessimistic about keeping Congress.

President Trump posted on Truth Social: "I wasn't on the Ballot and if I was, we would have won IN A LANDSLIDE!"

Why traders point to AI infrastructure

Nasdaq futures falling harder than the S&P 500 points to a technology-specific move. Investors say state-level results may matter as much as Congress, since governors control zoning and permitting and can suspend data center construction.

Democratic candidates for governor in Georgia and Texas, two of the busiest data center states, have called for temporary bans on new server farms, as has Michigan's Jocelyn Benson. In Texas, Senate candidate James Talarico has criticized tax incentives for tech companies and asked for more transparency and community input on data center projects. Investors said Democratic victories in Texas and Ohio on Tuesday prompted them to price in a possible construction slowdown.

Priya Misra, a portfolio manager at JPMorgan Asset Management, said divided government normally produces gridlock that helps markets. She questioned whether that holds this time, given bipartisan resistance to data centers and the economy's reliance on AI spending.

William Bratton, BNP Paribas's head of Asia-Pacific cash equity research, said the Democratic results were beating even the expectations of people who had predicted Democratic wins.

Strategists urge restraint

Not everyone reads the move as a verdict on the election. Robert Tipp, PGIM's head of global bonds, called the market response a "knee-jerk reaction" and said AI was generating substantial supply pressure.

Mark Haefele, global wealth management chief investment officer at UBS Switzerland, said the result may affect fiscal negotiations and near-term volatility, but growth, earnings, AI investment, inflation and interest rates "should remain more important market drivers."

James Ooi, chief market strategist at Tiger Brokers, said reactions will hinge less on which party wins than on how results compare with expectations.

The pressure on tech predates the vote. The Nasdaq 100 hit records in October, then fell nearly 10% and entered correction territory this week. Microsoft, Alphabet and Amazon all closed lower after reporting last week, as investors focused on cash going into AI infrastructure. Alphabet and Amazon forecast higher AI capital spending in 2027, and Microsoft said it expects its data center investment to continue. Microsoft spent $39.4 billion on property and equipment last quarter, nearly double the $19.4 billion a year earlier, and announced a $25 billion debt issuance on Oct. 29.

What comes next

The regular U.S. session opens at 9:30 a.m. ET today. Whether futures levels hold at the open is unknown.

Control of both chambers is not final, and the governor races in data center states are still being tallied. If Democrats take Congress while Trump stays in the White House, the debt ceiling is one flashpoint, as renewed brinkmanship could raise volatility and weigh further on the dollar.