Democratic wins in US Congress impact global markets and tech stocks
Investors are reassessing risks in AI and crypto as Democratic control of Congress may increase oversight of President Trump's policies.
A Democratic sweep of the US Congress has impacted global markets, leading to a decline in Asian technology stocks and the US dollar while boosting Treasuries, according to reports by The Economic Times and Moneycontrol.
The shift in Washington is prompting investors to reconsider trades linked to President Donald Trump’s agenda, which has supported deregulation and rapid artificial intelligence (AI) infrastructure growth. Democratic control is expected to bring increased investigations and oversight regarding his spending plans.
The AI sector faced pressure as Nasdaq 100 futures slumped and Nvidia Corp. fell during overnight trading. In Asia, South Korea’s Kospi dropped as much as 4%, with Samsung Electronics Co. and SK Hynix Inc. falling over 5% each, while Japan’s Nikkei 225 sank nearly 5%.
Anna Wu, an investment strategist and founder of Floodlines Research, said a Democratic Congress and states would lead to more scrutiny regarding power usage, data centres, and local approvals. Chris Weston, head of research at Pepperstone, noted that the scale of the Democratic win has forced a reassessment of risk.
Solar stocks rose as investors speculated that Democratic control might hinder or undo certain measures against clean-energy projects. South Korea’s Hanwha Solutions Corp. advanced as much as 17%, while US solar firms like Enphase Energy Inc. and SolarEdge Technologies Inc. rose as much as 12%.
Cryptocurrencies also declined, with Bitcoin falling as much as 2.8% to below $76,000. This comes as Trump has previously pledged to make the US a crypto capital and ease regulatory pressures on the industry.
