U.S. stock futures moved lower late Tuesday and early Wednesday after Democrats were projected to win control of both chambers of Congress in the 2026 midterm elections, according to CNBC. Traders read the results as a possible brake on the artificial intelligence buildout, and shares tied to data centers and chips sold off across overnight and Asian trading.
Futures on the S&P 500 and the Nasdaq-100 each slipped 0.6%, while Dow futures lost 161 points, or 0.7%, CNBC reported. The contracts had recovered somewhat from their weakest levels of the session by the time of the report.
The Associated Press projected that Democrats would take the House and the Senate, CNBC reported. The AP also called the Texas governor's race for Democrat Gina Hinojosa over Republican incumbent Greg Abbott. Hinojosa has promised a moratorium on data centers in a state that has become a major technology hub.
Why it matters
Wall Street has spent months treating AI infrastructure as one of the market's central growth stories, and the midterm outcome puts a political question mark over that spending. If a Democratic Congress pursues restrictions on data centers, the companies building and supplying them could face higher costs and slower timelines. AI-linked shares had already been retreating in recent weeks on worries that data center spending was cooling, CNBC reported, so the election result landed on an already nervous trade.
The results also remove the prospect of further business-friendly measures from a Republican-led Washington. Investors see a Democratic sweep as likely to rule out additional tax breaks and to invite closer scrutiny of industries such as banking, according to CNBC.
Overnight moves in AI and Texas names
Several high-profile technology stocks traded lower in overnight Robinhood trading, CNBC reported. Microsoft, Amazon and Nvidia all declined. CoreWeave, a riskier data center play, fell 4%, and SpaceX dropped 5%.
The Texas governor's race drew particular attention because of what it might signal for companies that relocated there. Jay Woods, chief market strategist at Freedom Capital Markets, told CNBC that investors should watch SpaceX and Tesla, noting that Elon Musk moved both companies' headquarters from California to Texas in 2024. Woods said firms that left California expecting a safer business climate may now find that assumption tested. Tesla shares were down more than 4% in overnight trading, and SpaceX later fell more than 6% on Robinhood as Hinojosa held her lead, according to CNBC.
Anthony Saglimbene, chief market strategist at Ameriprise Financial, told CNBC on Tuesday evening that equities were drifting lower as the odds of Democrats capturing the House and probably the Senate increased. He pointed to the governor's races as the key unknown for the buildout, asking what Democratic wins there would mean for data center construction at a time when hyperscaler capital spending is already being questioned.
Not every name fell. AMD jumped by double digits after hours following third-quarter results that beat analyst expectations, and the stock was recently up 5% on Robinhood, CNBC reported. Solar shares also gained on speculation that a Democratic majority would reverse policies President Donald Trump has pursued against the renewable industry; the Invesco Solar ETF rose 3% in Robinhood trading.
Trump Media & Technology fell more than 7% in overnight trading after CNBC's Election Desk projected a Democratic House win, with the Senate also trending toward the party.
Asia follows Wall Street down
The risk-off mood carried into Wednesday's Asian session, with semiconductor shares hit hardest. Japan's Softbank Group dropped more than 8%, chip equipment maker Disco lost 10.19%, Advantest fell over 8%, Renesas Electronics declined 7.64% and Tokyo Electron shed 7.04%, CNBC reported. In South Korea, SK Hynix slid 5.08%, Samsung Electronics lost 3.87% and Seoul Semiconductor gave up 4.37%.
Japan's Nikkei 225 fell 4.45% to its lowest level since May, with technology and energy stocks leading the decline, according to LSEG data cited by CNBC. The broader Topix index dropped more than 3%.
Investors sought safety in government debt. The 10-year Treasury yield fell nearly 5 basis points to 4.902%, the 30-year yield declined 5.29% and the 2-year yield dropped 6 basis points to 4.55%, CNBC reported.
President Donald Trump appeared to soften the political tension in comments to The Wall Street Journal, saying he expected to work with Democrats and get along well with them, according to CNBC. In a Truth Social post late Tuesday, he wrote that he was not on the ballot and that he would have won in a landslide if he had been.
What to watch: whether Democratic leaders translate campaign talk of data center limits into legislation, and how hyperscalers describe their capital spending plans in the coming weeks.
