Democrats won big in the midterms, and Wall Street is reacting early Wednesday morning.
After uncertainty leading up to the elections impacted investment decisions from those unsure what a shift in power would mean for big issues like artificial intelligence development, taxes, health care, and the regulation of cryptocurrency, stock futures slowly crept up the morning after the midterms.
“S&P 500 futures were up 0.35%, while Nasdaq-100 futures rose 0.16%. Futures tied to the Dow Jones Industrial Average rose 0.84%,” Fox Business reported.
Charu Chanana, chief investment strategist at Saxo in Singapore, explained the seemingly hesitant optimism on display.
“Markets appear to be pricing in the possibility of a stronger-than-expected Democratic showing, which could reduce expectations for further fiscal stimulus,” she told Reuters.
Unfortunately for the GOP, the blue wave wasn’t exactly unexpected. From polls to prediction markets, it was clear that Democrats across the country were going to experience a midterm victory; the only matter up for debate was scale.
“Chanana said investors may be concerned that Democratic control of Congress could bring greater regulatory scrutiny of AI and Big Tech, particularly as investors question lofty valuations and rising AI-related spending,” Fox Business noted. But this doesn’t mean that everyone invested in potentially affected stocks should panic.
“However, lower Treasury yields could eventually provide some relief, so the initial selloff may not necessarily be sustained,” she pointed out.
Most importantly, the euro and the British pound both gained against the United States dollar, which weakened and fell 0.32%. This could present difficulties for those leftists who ran on reversing the affordability crisis that they are all-too-happy to blame on President Donald Trump.
It remains to be seen how effective Democrats will be in enacting any policies; however, the president recently unveiled how he would react to a blue wave. As BizPac Review previously reported, he plans to become just as obstructive of their agenda as they have been of his since his first election in 2016.
“Well, if that happens, I’ll become Mr. Veto,” he admitted. “And then at some point we’ll probably make deals; that’s what’s happened. This wouldn’t be the first time. You’ll have a president, and you won’t have the House or the Senate; they’ll be sending stuff up, you veto it, and eventually, after a month or two of getting all vetoed, they’re just wasting [time], they come over, and you make a deal. I think that would probably happen, but hopefully we don’t have to worry about that.”
