Market Overview
US stock futures and Asian chip shares fell as investors weighed what Democratic election gains could mean for data center construction. Democrats won control of the Senate and were projected to take the House. In Australia, miners led the ASX 200 lower, while Hong Kong and Shanghai advanced in afternoon trading. European equity futures pointed to a weaker open.
Markets
Australian equities concluded Wednesday’s session lower, with the S&P/ASX 200 (^AXJO) declining 0.59% to 8,834.50. Six of the 11 sectors fell, led by miners as metals prices weakened.
Asian benchmarks were mixed in afternoon trading. Japan’s Nikkei 225 (^N225) fell 1.58%, while South Korea’s KOSPI (^KS11) edged up 0.04% despite losses in major chip stocks. Hong Kong’s Hang Seng Index (^HSI) gained 1.28% and the Shanghai Composite (000001.SS) rose 1.83%. Singapore’s Straits Times Index (^STI) slipped 0.63%.
In overnight trading, S&P 500 futures fell 0.34%, Nasdaq-100 futures lost 0.48% and Dow futures slipped 0.14%. European stock futures are pointing to a negative start for the upcoming session, with Stoxx 50 futures lower by 0.35%, the U.K.’s FTSE 100 futures down 0.64%, Germany’s DAX futures off by 0.46%, France’s CAC 40 set to start 0.28% lower, and Italy’s FTSE MIB indicated down 0.21%.
What Drove Markets
In Texas, Democrat Gina Hinojosa won the governor’s race after campaigning for a pause on new data centers until state lawmakers could set rules for their construction. Her victory drew investors’ attention to the role governors could play in future projects. Anthony Saglimbene, chief market strategist at Ameriprise Financial, said Tuesday evening that the prospect of Democratic gains in Congress and in governors’ races added to existing concerns about spending by large cloud providers.
Australian equities broadly declined, influenced by the negative sentiment emanating from US futures. Locally, concerns included anticipation of Australia’s September trade data, due Thursday, and warnings from Reserve Bank Governor Bullock. Bullock cautioned that elevated oil prices, persistent inflation, and slowing economic growth would continue to pressure households over the coming year. The Reserve Bank of Australia raised its cash rate target by 25 basis points to 4.85% on Tuesday. On Wednesday, Commonwealth Bank fell 0.58%, while ANZ, National Australia Bank and Westpac all closed higher.
Stocks to Watch
In Japan, SoftBank Group (9984.T) fell more than 8% and Tokyo Electron (8035.T) lost 7.04% in intraday trading. Disco, Advantest and Renesas Electronics also fell. In South Korea, SK Hynix (000660.KS) was down 5.08% and Samsung Electronics (005930.KS) was down 3.87% during the session. Seoul Semiconductor (046890.KQ) also traded lower. In Taiwan, TSMC (2330.TW) closed down 1.53% at NT$2,260.00.
In Australia, BHP Group (BHP.AX) fell 1.52% to A$55.56, Rio Tinto (RIO.AX) declined 1.69% to A$143.05 and Fortescue (FMG.AX) lost 1.46% to A$14.19. REA Group and Goodman Group also fell.
In overnight trading on Robinhood, Microsoft, Amazon and Nvidia traded lower. CoreWeave fell 3.4% and SpaceX lost 4.8%. After Tuesday’s regular close, AMD (AMD) reported third-quarter earnings and revenue above expectations. Its shares gained 5% in overnight trading. The Invesco Solar ETF rose 3% on speculation that a Democratic majority could reverse policies affecting the solar industry.
Brent Crude (BZ=F) futures traded at US$103.89 per barrel, up 0.28% from the previous daily close.