US stock futures and the dollar fall as Democrats take control of the Senate in tight Georgia runoff elections

Business Insider:

  • US stock futures fell along with the dollar as investors reacted to two crucial Democrat victories in the Senate in tight Georgia runoff elections
  • Democrats Raphael Warnock and Jon Ossoff were projected to win their respective Georgia elections for Senate seats, handing their party majority control.
  • Analysts said US tech companies and their shares could be in for a tougher ride under a ‘blue sweep’ but said more stimulus could boost the economy.

US stock futures fell along with the dollar on Wednesday after the Democrats wrested control of the Senate from the Republicans by narrowly winning two George runoff elections.

The 10-year US Treasury yield hit 1% for the first time since the start of the coronavirus pandemic as investors moved to price in more stimulus under a Democratic Senate and presidency.

Democrat Raphael Warnock beat incumbent Republican Kelly Loeffler in one Georgia race, while fellow Democrat Jon Ossof was projected to see off Republican David Perdue in the other.

It means the Senate will be evenly split, handing Democrat Vice President-elect Kamala Harris the deciding vote. The Georgia results will give Democrats control of the Senate, House, and the White House.

US stock futures fell as investors mulled the Georgia results, with S&P 500 futures down 0.36%.

Futures for the tech-heavy Nasdaq tumbled 2%, reflecting worries that Democrats would raise taxes and crack down on the big US tech companies’ market dominance.

The victories give President-elect Joe Biden the chance to carry out his wide-ranging agenda, Danske Bank senior analyst Mikael Olai Milhoj said in a note.

“It becomes easier for the Democratic Party to make bigger changes to economic policy” such as “tax hikes and more investments in green energy,” he said.

The dollar fell 0.12% against a basket of other currencies, as traders priced in more fiscal stimulus as the final Georgia runoff election votes were counted.

The dollar fell 0.12% against a basket of other currencies, as traders priced in more fiscal stimulus as the final Georgia runoff election votes were counted.

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