Early US midterm results favored Democrats, with Senators Jon Ossoff and Mark Warner winning in Georgia and Virginia, respectively. As results came in, Bitcoin (BTC) traded slightly lower, and S&P 500 futures fell 0.6%.
Futures markets react
S&P 500 futures reversed an early gain as prediction market Kalshi put Democratic Senate odds near 90%. Nasdaq-100 futures lost 0.5%, and Dow Jones Industrial Average futures fell 252 points, also 0.5%. Kalshi put Democratic odds of winning the House at 97%, an outcome markets had largely expected.
Futures on the Cboe Volatility Index (VIX) climbed to 20.90.
AI and data center concerns
Traders fear a Democratic sweep could curb data center growth, hitting artificial intelligence (AI) stocks. Investors worry a Democratic majority could bring nationwide data center limits. AI stocks had already pulled back in recent weeks on slowing spending worries.
Advanced Micro Devices (AMD) first jumped double digits after hours on third-quarter earnings that beat estimates. The stock later pared gains to about 4%.
Osaic chief market strategist Philip Blancato said a sweep might not drag the broader market. “In that scenario of a Democratic sweep when there’s less funding for AI or less support for data centers, I think the rest of the market will do quite well because of how strong earnings have been,” he said, according to CNBC.
Bitcoin and historical patterns
Bitcoin traded slightly lower on the day as results started coming in. CNBC found the S&P 500 rose after all 11 midterms from 1982 to 2022, with an average gain one year out of 13.7%. Binance Research data showed Bitcoin gaining 54% on average after past midterms, though the sample is small.
If that pattern holds, the election-night dip could fade. A decisive Senate result reshaping AI and tax policy would make that read wrong. Control of Congress could set rules on data centers and tax breaks, shaping the AI trade that drives equity risk appetite, which crypto prices may follow.
