Equities fell overnight after projections indicated Democrats would secure the House, while Senate control remained in balance following a Democratic flip in North Carolina. Technology and artificial intelligence assets suffered some of the steepest losses as investors reevaluated the regulatory and legislative outlook for data centers. In response, market participants sought refuge in U.S. sovereign debt, sending yields on the 10-year note down nearly 5 basis points to 4.902%.
Key points
Political shifts prompted a flight to safety as Democrats were projected to win the House…: Political shifts prompted a flight to safety as Democrats were projected to win the House of Representatives.
Concerns regarding potential regulatory slowdowns for data centers drove heavy selling in…: Concerns regarding potential regulatory slowdowns for data centers drove heavy selling in artificial intelligence equities.
Yields dropped across all major maturities, including a 5.29% decline recorded on the 30-…: Yields dropped across all major maturities, including a 5.29% decline recorded on the 30-year bond yield.
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Treasury yields fell as investors sought shelter from a sell-off in equity futures sparked by potential big victories from Democrats in the U.S. midterm elections.
The benchmark 10-year Treasury note yield dropped nearly 5 basis points to 4.902%. The 30-year bond yield slid 5.29%, and the shorter-term 2-year note yield pulled back 6 basis points to 4.55%.
One basis point equals 0.01%, or 1/100th of 1%, and yields and prices move inversely to one another.
Democrats are projected to win the House, according to a CNBC Election Desk projection. And while the Senate was still up for grabs, Democrats have already flipped a seat in North Carolina, with former Gov. Roy Cooper projected to win.
Stock futures fell sharply as election results rolled in. Contracts tied to to the S&P 500 shed 1.1%, and Nasdaq-100 futures slid 2%. AI-related shares, which have led the bull market, paced the overnight decline on fear Democrats would slow the data center buildout.
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