Global equities were little changed on Tuesday as Americans voted
62/ 100United States, South Korea, Taiwan, China, Japan
Summary
Emirates NBD's morning note captures a market caught between two stories: on Tuesday, global equities were little changed, with the S&P 500 up 0.4% on a chip rebound and the Nasdaq 100 up 0.7%, while emerging markets fell 1.7% as the selloff hit Korea and Taiwan, each down 3.6%. Overnight the election result arrived, with Democrats taking the House at about 248 seats to 187 on the NBC estimate and closing in on the Senate, sending US futures, the dollar and yields lower. The note reads the outcome as gridlock plus investigations, with AI oversight and the defence budget most exposed, against the post-midterm history cited by the note.
Highlights
Global equities were little changed on Tuesday as Americans voted, the S&P 500 rose 0.4% on a chip rebound while emerging markets fell 1.7% as the chip selloff reached Korea and Taiwan.
Democrats took the House with about 248 seats to 187 on the NBC estimate and flipped Senate seats in Texas, South Carolina and North Carolina.
The S&P 500 has never been lower twelve months after a midterm since 1950.
Contrarian Viewpoints
- At the time of writing the Senate outcome was not yet called, so a Democratic sweep was likely but not confirmed.
- The morning-after market move, with S&P 500 futures down 1.3% and Nasdaq 100 futures down 2.3%, cuts against any simple relief-rally reading of the result.
Investment Implications
- Treat gridlock as supportive for Treasuries on lower spending and borrowing expectations, while watching AI oversight and defence-budget scrutiny for exposed names.
- Be cautious on Korea and Taiwan semiconductor exposure after both markets fell 3.6% on the chip selloff spreading from the US.