U.S. Stock Futures Fall After Democrats Regain Congress, Win Texas and Ohio Governor Races

U.S. stock futures fell Tuesday night, Nov. 3, as traders assessed Democratic gains in Congress and gubernatorial victories in Texas and Ohio that could affect fiscal talks and data-center development.

Futures tied to the Dow Jones Industrial Average dropped 408 points, or 0.79%. S&P 500 futures fell 1.25%, while Nasdaq futures lost 2.24%.

Democrats won Senate races in South Carolina, Texas, Kansas and Iowa, regaining control of both chambers of Congress. Democratic candidates also won gubernatorial races in Texas and Ohio. Both states have become major data-center hubs, where rapid construction has drawn opposition that could weigh on the AI trade.

Wall Street often favors divided government because split control can limit one party’s ability to push major policy changes. Market veteran Ed Yardeni warned that deeper partisan conflict could turn political gridlock into damaging paralysis as bond investors grow uneasy about U.S. debt and deficits. He said extended shutdowns and disputes over spending or the debt ceiling could push Treasury yields higher and pressure equity valuations.

Yardeni also pointed to President Donald Trump’s use of executive authority for policies including tariffs and the Iran war, which Congress cannot restrain as easily. He warned that Trump could feel less politically constrained after the midterms and pursue controversial policies through executive action.

Christopher Hodge, chief U.S. economist at Natixis CIB Americas, said Democrats could use debt-ceiling or shutdown negotiations to seek concessions on health care spending or green-energy subsidies. Hodge cautioned that the results may reflect a rebuke of Republicans as much as support for Democrats. He also noted that some Democrats represent traditionally Republican districts and may have less appetite for partisan conflict, while more moderate Republican candidates kept some purple-state races competitive.