Democratic Win in U.S. Midterms Shakes Global Markets and Oil Prices
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Global financial markets reacted this Wednesday to the Democratic Party's victory in the U.S. midterm elections. The dollar fell against the Chilean peso, Wall Street futures rose and Treasury bonds posted gains, amid a wave of optimism following the Democrats' win, which secured majorities in both the Senate and the House of Representatives.
Dollar Slides as Bonds Advance
In the local market, the dollar plunged $9.7 at the opening of Wednesday's session, trading at around $972.2 for buyers and $972.5 for sellers, according to EMOL. The dollar index (DXY) slipped to 101.2 points, while the yield on the 10-year U.S. Treasury note fell to 4.9291%, and the 2-year note yield dropped to 4.6017%. Copper rose to US$6.44 per pound and gold climbed above US$4,000 per ounce.
Wall Street Responds with Optimism
In the United States, Dow Jones futures climbed 1.56% to 52,703 points, the Russell 2000 rose 1.42% to 2,865 points, the S&P 500 gained 1.13% to 7,682.75 points, and the Nasdaq 100 advanced 0.92% to 28,565.50 points, according to data from XTB cited by Ignacio Mieres, head of research at the firm. Mieres noted that markets reacted calmly after initial losses and that the optimism spread to Europe.
Concerns Over Deregulation and Greater Scrutiny
The election results raised uncertainty over the continuity of the deregulation policies that benefited artificial intelligence and the financial sector over the past two years. According to Hellenic Shipping News, Democratic control of Congress could lead to increased legislative hearings on artificial intelligence and technology, along with a slowdown in data center construction and greater obstacles for fossil fuel producers.
Oil Prices Hinge on the Conflict with Iran
The oil market showed mixed reactions depending on the source. Ship & Bunker reported a 9% drop in crude prices, with Brent at US$93.91 and West Texas Intermediate at US$87.59 per barrel, attributed to expectations that the Democratic victory would facilitate an end to the conflict between the United States and Iran. In contrast, mas container reported that Brent fell 1.21% to US$102.2 and WTI dropped 0.95% to US$95.1. Andy Lipow, president of Lipow Oil Associates, noted that the election results lead markets to believe Trump could seek a deal, while Bob McNally of Rapidan Energy warned that military escalation against Iran remains likely.
