Wall Street Futures Plunged After Democrats Swept Congress. Then Investors Started Buying Again.

Merin Rebecca Thomas Published 11/04/26 AT 5:27 AM EST Share on Facebook Share on Twitter Share on LinkedIn Share on Reddit Share on Flipboard Share on Pocket Traders work on the floor of the New York Stock Exchange in New York City on Oct. 21, 2026. U.S. stock futures recovered from sharp overnight losses following the Democratic sweep in the midterm elections, as investors weighed the potential impact on AI stocks and financial markets. Getty Images U.S. stock futures recovered Wednesday morning after falling sharply overnight as Democrats won control of both chambers of Congress, raising concerns among investors about tougher regulation of artificial intelligence and the future of the technology industry's massive data-center investments.

Nasdaq-100 futures fell as much as 2.4% as the election results came in, while S&P 500 futures dropped 1.4%, Reuters reported.

The losses did not last long. By 3:13 a.m. ET, Dow futures had climbed 237 points, or 0.46%. S&P 500 futures were up 0.15%, while Nasdaq-100 futures gained 0.26%.

Democrats secured majorities in the House and Senate after defeating Republicans in several longtime GOP strongholds, including Texas and South Carolina. The result leaves President Donald Trump facing an opposition-controlled Congress for the remaining two years of his term.

Technology companies were among those facing selling pressure. Shares of Amazon, Alphabet, Microsoft and Meta traded lower on Germany's Tradegate platform as investors considered what a Democratic Congress could mean for the AI industry.

"The significance of these midterm elections is more like a referendum on AI than a referendum on Trump," Aidan Yao, senior investment strategist for Asia at Amundi Investment Institute, told Reuters.

The four technology giants have been spending billions of dollars developing AI services and building the data centers needed to run them. Their investments have also helped fuel demand for electricity, raising concerns about rising energy bills and the strain on local infrastructure.

Texas and Georgia, where Democrats made electoral gains, are among the states attracting major data-center projects. Investors are concerned that greater congressional scrutiny could slow the industry's expansion.

The AI trade was already under pressure before Tuesday's election. The Nasdaq-100 entered correction territory Monday as investors questioned whether technology companies could generate sufficient returns on their growing AI investments.

The Democratic victory also raised questions about future restrictions on cryptocurrencies, corporate taxes and financial regulation.

"Tighter regulatory scrutiny of technology and AI companies along with the higher likelihood of political gridlock beckon with a Democrat sweep," Prashant Newnaha, senior rates strategist at TD Securities in Singapore, told Reuters.

The dollar weakened following the results, while U.S. Treasury bonds gained as investors sought safer assets. Democrats will have greater power to investigate companies and question administration policies, although Trump can still veto legislation passed by Congress.