The dollar weakened, Asian shares fell and gold rose after Democrats took control of both chambers of Congress, though investors weighed how much of the party’s agenda could become law.
Markets were on edge on Wednesday as Democrats secured control of Congress in the US midterm elections, a result that leaves President Donald Trump facing a legislature with the power to obstruct parts of his agenda. According to The Associated Press, Democrats flipped enough Senate seats and House districts to take both chambers, a result that was broadly in line with what traders had been pricing in before the vote.
The political shift immediately fed through to currencies and equities. The dollar weakened against major peers, with the euro climbing to its strongest level in about a month and the Swiss franc also gaining ground, while Asian shares opened lower and US stock futures slipped. Reuters and The Associated Press both said Japan’s Nikkei fell sharply, even as some Chinese markets held up better, underscoring how investors were reassessing the outlook for growth, policy and risk appetite.
Gold moved higher as investors sought safety. The metal rose to around $4,012 an ounce in early trading, building on gains seen after the election result became clearer, while Treasury prices also rallied as yields eased, according to live market coverage from The Guardian. That pattern suggested some traders were positioning for a more cautious policy mix and a weaker dollar, both of which can support bullion.
Analysts said the bigger market question is not simply which party controls Congress, but how much can actually change. Patryk Pyka of DI Xelion told the Polish daily Rzeczpospolita that a Democratic majority could mean greater pressure for higher corporate taxes and tighter oversight of artificial intelligence, including the energy and environmental costs of data-centre expansion. But he noted that any major bill could still be blocked by a presidential veto unless Democrats could muster a two-thirds majority in both chambers, a threshold they do not have.
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