Democrats Flipped 7 Senate Seats and 16 House Seats. The Futures Fell 2.4% in the Count, Then Went Up.

Americans voted on Tuesday. The futures voted twice.

The result first, because it is the news. The Democrats won the Senate and the House. AP’s Senate story went out at 04:40 UTC and AP called the House at 06:26 UTC. By AP’s count at 06:30 UTC, Democrats had flipped 7 Senate seats and 16 House seats, and Republicans had flipped none. Washington is now split: a Republican President and, from January, a Democratic Congress.

The futures traded the count. December Nasdaq 100 futures settled on Tuesday at 28,305.75. The first polls closed at 23:00 UTC, the minute the futures reopened. As the early Democratic wins came in, the contract fell, 1.02% in the 01:00 UTC hour alone, to an overnight low of 27,615.75 in the 03:00 UTC hour: 2.44% below settlement. December S&P 500 futures bottomed at 7,490, down 1.41%.

Then, as the sweep was confirmed, they went up, and they kept going. Every hour from 04:00 UTC closed higher. By the 07:45 UTC capture the Nasdaq 100 contract was 0.21% lower; by the 10:00 UTC bar it was 0.98% higher, 3.50% off the low. The S&P contract was 1.03% higher at 7,674.75. The night sold the result. The morning bought it.

Which call moved which leg is not stamped, so this book names no single headline as the cause. The first significant call, Georgia, came at about 01:00 UTC, and the contract had already fallen 0.62% in the 00:00 UTC hour. The low came in the 03:00 UTC hour, before the Senate stamps at 04:27 and 04:40 UTC. The order is held. The attribution of each leg is not.

The desks’ own reading of the morning, which this book labels as a reading: a divided Washington means fewer big spending bills and smaller deficits, and less legislation of any kind. J.P. Morgan Asset Management expects deficits “much more controlled”; Longbow sees “pressure on tech” from AI regulation.

Then there is gold, which did not come back down. Spot gold closed Tuesday at 3,929.76. At the capture it was 4,026.07, up 2.45%, and at the 10:00 UTC bar 4,046.32. The dollar index fell 0.47% over the night and the yen firmed 0.38%. This book holds no measure of how much of gold’s move the dollar accounts for, so it prints the two side by side and leaves them there.

Labelled speculation. For gold: 77% of its rise to the capture came after 05:00 UTC, behind NBC’s Senate projection by 04:27 UTC and AP’s story at 04:40 UTC. Rivals were stamped early enough too: Trump’s “locked and loaded” remark on Iran at 02:00 UTC and the Texas governor’s concession at about 04:00 UTC. None of this is a retrieved cause. It is an order of events with guesses attached, and the guesses are labelled.

The one number that mattered is the result: 7 Senate flips and 16 House flips, against a Nasdaq 100 contract that fell 2.44% while they were counted and finished the morning higher. Gold kept its gain throughout. Everyone heard the same result. Only gold kept the receipt.

Elsewhere the night had a stamped cause, for once. AMD reported at 21:15 UTC, guided fourth-quarter revenue to about $17bn and rose 5.02% after hours. That is a cause for AMD’s shares, and only for AMD’s shares.

The cash market opens at 14:30 UTC, the first session in which anybody has to pay a closing price for an opinion about Congress. ADP prints at 13:15 UTC and ISM services at 15:00 UTC.

The One That Mattered

The Nasdaq 100 contract fell 2.44% while the votes were counted and bought every point back by 08:20 UTC. Spot gold rose 2.45% and kept it, three quarters of the rise arriving after 05:00 UTC. Stock futures ended the night where they started. Gold did not. A haven that keeps rising after the selling stops is early, right, or thinly traded. Why did gold rise 2.5% overnight while the Nasdaq futures recovered their fall? We have not answered that here. We sat down with it in today’s Macro Edge.

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Hot News: The Midterms, Decided

Democrats Took Both Chambers. Nobody Sits Until January. 7 Senate flips, 16 House flips and no Republican gains by 06:30 UTC

Going in, Republicans held the Senate 53 to 47 and the House 218 to 214. Coming out, both belong to the Democrats. In Texas, James Talarico beat Ken Paxton. In Ohio, Sherrod Brown beat Senator Jon Husted. In North Carolina, Roy Cooper won the open seat. In Georgia, Jon Ossoff held his. Final seat totals wait on uncalled races.

What it means is a divided Washington. The President keeps tariffs, foreign policy and the executive order; Congress gets the purse and the subpoena. The desks’ first readings, labelled as readings: Natixis does not think “the direct implications are huge”; HashKey thinks crypto legislation could stall; Longbow expects AI regulation to weigh on tech.

What it does not mean is anything settled. The new Congress is sworn in in January. The market’s verdict so far is the one above: a 2.44% fall in the count, a climb every hour after it, and a gold price that has not come back. The cash session is the first one that has to close on it. This book will keep the thread open until the follow-through is in.

Overnight Excitement

Polls Closed at 23:00 UTC. So Did Nobody’s Laptop. A 2.44% overnight fall in Nasdaq 100 futures fires the section, and the recovery is the story

The section fires on the futures. December Nasdaq 100 futures fell 2.44% below settlement at their overnight low, past the 2.0% mark that makes an overnight move a spine candidate. At the capture they were 0.21% lower, back inside the quiet band, and by 10:00 UTC 0.98% higher.

The night, in UTC. Futures reopened at 23:00 as the first polls closed, and made their overnight high in that hour. Georgia was called for the Democrats at about 01:00. For the Nasdaq contract the 01:00 hour was the worst, down 1.02%. The low came in the 03:00 hour. NBC projected the Senate by 04:27 and AP’s Senate story went out at 04:40. AP called the House at 06:26. Every hour from 04:00 to 10:00 closed higher.

Asia, on syndicated reports, sold off early and pared losses in the afternoon, with Korea turning higher; chip stocks in Korea and Taiwan led the morning losses. Spot gold rose 2.45% to the capture and the dollar index fell 0.47% to 101.41. December WTI barely moved, at 96.31 at the capture against a 96.09 settlement. The Riksbank decided at 08:30 UTC.

Stock Market Edge

Futures Fell 1.41%, Then Remembered They Had a Cash Session to Get To S&P futures 0.11% lower at the capture and 1.03% higher by 10:00 UTC

Premarket snapshot:

At the 07:45 to 07:50 UTC capture, December S&P 500 futures stood at 7,588.50, 0.11% below Tuesday’s settlement of 7,596.75. December Nasdaq 100 futures were 0.21% lower at 28,247, December Dow futures 0.22% higher at 52,011 and December Russell 2000 futures 0.44% higher at 2,837.50. The overnight lows, 7,490 and 27,615.75, both came in the 03:00 UTC hour. By the 10:00 UTC bar, S&P futures were 1.03% higher at 7,674.75 and Nasdaq 100 futures 0.98% higher at 28,583. The VIX had no global-hours print at the capture; it closed Tuesday at 20.83. A 1.41% scare that turns into a 1.03% gain by breakfast is not yet a verdict on Congress. It is a very confident breakfast.

Sector rotation:

Tuesday’s cash session rose on the surface. The S&P 500 gained 0.36% to 7,568.92, the Nasdaq 100 0.68% to 28,180.26 and the Composite 0.83%, whilst the Dow fell 0.38%. Underneath, NYSE decliners beat advancers 1,666 to 1,012, and up volume was 0.60 of down volume. Technology rose 1.31%, communication services 1.18%, industrials 0.95%. Staples fell 2.07% and materials 2.01%. On Nasdaq, a count of all listed issues, advancers led 2,547 to 2,295. The index went up. Most of the NYSE went down.

Earnings or guidance:

AMD reported third-quarter revenue of $13.38bn, guided the fourth quarter to about $17bn and put data-centre revenue up 97%. It had already risen 3.65% to 483.90 before the release, then added 5.02% after hours to 508.20 on a write-up without a quote time. Arista rose 9.19% after hours, Super Micro 7.2% and Duolingo 11%; Toast fell 5.22%. In the session Oracle rose 5.85% and Nvidia 2.29%. Gartner fell 13.19%, and this book holds no cause for it. Fiserv rose 12.46%, and this book holds no cause for that either. Apple fell 1.90% and Palantir 1.65%.

Cross-asset nuance:

The 2-year yield rose 2bp to 4.61% on Tuesday and the 10-year 4bp to 4.95%. On Monday this book named the 12:30 UTC wage-cost release as the cause of Friday’s 2-year fall and said the yield would stay under 4.61%. It closed at 4.61%, not under. That mark is a miss, and it goes in the ledger as one. The 20-year, at 5.35%, topped the curve for a 38th session. The VIX fell 1.51% to 20.83 against VIX3M at 21.27. The semiconductor funds diverged by 0.49 points, SOXX up 2.50% and SMH 2.01%. That completes the ten-session window on this book’s open shot without one session under 0.1 points: a hit.

Crypto Market Edge

Bitcoin Rose 0.81% Into Midnight and Another 1.02% by the Capture Ether added 0.92%; the flow tables stayed shut

Price snapshot:

Bitcoin was 77,328.21 on the Wednesday 00:00 UTC mark, up 0.81% from 76,710.54, then 78,118.45 at the capture and 78,266.21 at 08:20 UTC. Ether was 2,271.10, up 0.92%. This book holds no hourly bitcoin path, so it cannot say what bitcoin did at 03:00 UTC. It can say bitcoin finished the night higher than it started.

Flows and positioning:

Farside’s bitcoin and ether tables both returned errors, again. Relays carry flow figures; this book publishes none of them.

Leadership and rotation:

Ether outpaced bitcoin slightly. On Stocktwits at 07:30 UTC, Trump Media ranked second on the all-asset board, behind SPY. TRUMP.X, a memecoin, ranked sixth on the crypto board. Attention is not policy. On the desks’ readings, a divided Congress may stall crypto legislation; that is a reading, not a price.

Catalysts and roadmap:

Strategy has filed no 8-K since 2 November, when it bought 811 bitcoin for 849,327 held. The sale count stays at two. This week: ADP and ISM services today, the Bank of England on Thursday, payrolls on Friday at 13:30 UTC.

TL;DR

• Democrats won both midterm chambers: AP’s Senate story went out at 04:40 UTC and AP called the House at 06:26 UTC, counting 7 Senate and 16 House flips.
• Nasdaq 100 futures fell 2.44% in the count, to a low in the 03:00 UTC hour, then rose every hour to finish the morning 0.98% above settlement.
• Spot gold rose 2.45% to 4,026.07 at the capture and 4,046.32 by 10:00 UTC; the dollar index fell only 0.47%, explaining little of it.
• AMD guided fourth-quarter revenue to about $17bn and rose 5.02% after hours, a stamped cause that covers AMD’s shares and nothing else.
• The 2-year rose to 4.61%, so the yield call this book attached to its wage-cost cause is a miss; ADP prints at 13:15 UTC.

Fun Fact

Election Day Has a 7-Day Window It can fall no earlier than 2 November

Congress set the Tuesday after the first Monday in November for choosing presidential electors in 1845, and extended it to House elections in 1872. So federal Election Day lands between 2 and 8 November, and never on the first.