US stock index futures sold off sharply on November 4 as investors reacted to a decisive Democratic sweep in the midterm elections. Dow Jones futures dropped 440 points, S&P 500 futures fell 102 points, and Nasdaq 100 futures tumbled 660 points, extending a multi-week decline that had already pushed the Nasdaq 100 into a technical correction.
The election outcome was widely seen as a rebuke to President Donald Trump, whose approval ratings have fallen to record lows amid higher gasoline and diesel prices, rising health insurance costs and corruption allegations. Democratic victories included historically Republican areas such as Kansas and Texas, with Adam Hamilton flipping a Kansas seat and James Talarico becoming the first Democrat to win a Texas election.
Investors are now bracing for possible policy shifts in Washington. Some Democrats have voiced opposition to data centers being built across the country and support ending certain tax breaks introduced under Trump, which could affect the broader equity and technology sectors.
Before the election, stocks were already under pressure. The S&P 500 and Dow Jones were down more than 5% from recent peaks. Technical analysis shows the S&P 500 formed a double-top pattern near 7,863 with a neckline at 7,579, and has since broken below the 50-day exponential moving average and the Supertrend indicator. Analysts point to a potential further decline toward the 7,319 support level, the 38.2% Fibonacci retracement, before dip-buying may emerge.
Separately, AMD earnings were in focus as a potential test for confidence in AI-related stocks, while Apple and Palantir declined despite posting strong quarterly results. History suggests US stocks often recover regardless of which party controls Congress, with the S&P 500 rising 31.5% in 2019 after a Democratic win and 26% after a Republican win.
