Dollar falls while gold and US Treasury bonds rally as markets react to Democrats’ midterm election victory – business live

Over here, stock markets have risen this morning, with banks and clean energy stocks leading the gains. The FTSE 100 index in London is 24 points, or 0.2% ahead.

The pan-European SToxx 600 index gained 0.6%, with Germany’s Dax almost 0.6% ahead and France’s CAC up 0.4%, and Italy’s FTSE MiB index jumping almost 1.4%.

Bank stocks leapt 2.8% and clean energy stocks, which have borne the brunt of Donald Trump’s policies, were also among the top risers. Denmark’s Vestas Wind Systems jumped about 5% and Ørsted surged 7.4% while the German wind turbine company Nordex leapt 6.5%.

European defence stocks fell, while European tech stocks recovered to trade 0.5% higher.

Democrats have taken control of both the Senate and House of Representatives and scored victories in Republican strongholds for the first time in generations, as voters rejected Trump’s agenda.

This ushers in an era of divided government in Washington, following two years in which the Republican-controlled Congress rarely reined in Trump.

Investors are assessing the prospect of tougher US regulation on the booming AI sector (where fears over ballooning debt levels to fund the infrastructure buildout have already led to selloffs in recent months), higher taxes and oversight of cryptocurrencies.

Shares of big technology companies Amazon, Google owner Alphabet, Microsoft and Meta Platforms, the parent company behind Facebook, WhatsApp and Instagram, declined on the Tradegate platform in Europe, according to Reuters. Elon Musk’s Tesla and SpaceX both fell between 4.5% and 5%.

Overall, these results have had a mild impact on markets so far. Investors will move on from trading the uncertainty of the election results to trading the reality of what they mean for policy.

This is bad news for Tesla and SpaceX on Wednesday, but the semiconductor names, the backbone of the AI trade, could brush off concerns about AI regulation ‌and continue to move higher after Tuesday’s stunning rally for the sector.

The significance of these midterm elections is more like a referendum on AI than a referendum on Trump. If the AI theme is subject to some restrictions, then the US economy, US inflation and US monetary policy all become very, very uncertain.

The price of gold, seen as a safe haven in times of uncertainty, jumped 3% to $4,046 an ounce (for spot gold).