Global Market Today: Asian shares retreat as US futures slide on mid-term election bets

US equity-index futures fell and the dollar weakened as early midterm vote counts and prediction markets pointed to rising chances of a Democratic victory, raising the prospect of gridlock in Washington. Treasuries gained.

Contracts for the S&P 500 Index dropped 0.3%, erasing an initial gain of 0.5%, while those for the Nasdaq 100 declined 0.6%. The dollar dropped against most of its Group-of-10 peers and the yield on the benchmark 10-year Treasury note fell four basis points to 4.92%. The MSCI Asia Pacific Index dropped 0.2% even as South Korea’s Kospi Index jumped 1%.

Millions of Americans cast ballots Tuesday in races that will determine control of Congress as well as a range of local issues. The first polls closed at 6 p.m. Eastern time.

Kalshi is pricing roughly a 97% probability of Democrats taking the House of Representatives and about an 86% chance of winning the Senate, pointing to the possibility of a sweep of both chambers.

“Early headlines and prediction markets are suggesting a rising probability of a blue wave,” said Andrew Ticehurst, a senior rates strategist at Nomura Holdings Inc. in Sydney. “That scenario is generally regarded as being negative for the dollar and positive for US Treasuries. Markets are reacting consistently with that in early Asia trading.”

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The rebound in technology shares now faces the US midterm results, which may remove a key source of uncertainty and refocus investors on the outlook for AI spending and geopolitical risks heading into year-end.“The results could act as a clearing event, removing some uncertainty, though developments around the AI theme and geopolitics are the primary forces driving markets heading into the final two months of the year,” said Angelo Kourkafas, a strategist at Edward Jones.

Millions of Americans are casting ballots Tuesday in races that will determine control of Congress as well as a range of local issues. The first polls closed at 6 p.m. Eastern time.

Polymarket is pricing roughly a 98% probability of Democrats taking the House of Representatives and about a 88% chance of winning the Senate, pointing to the possibility of a sweep of both chambers.

“Tuesday’s elections could reshape the balance of power in Washington,” said Ken Mahoney at Mahoney Asset Management. “This will be good to put behind us as it has been an anticipated volatility event for quite some time.”

Geopolitical risks remained in focus as oil swung in choppy trading while investors parsed conflicting signals on the trajectory of peace talks between the US and Iran.

Tehran and Washington are reviewing fresh proposals from mediators aimed at resolving their differences and avoiding a return to all-out war, according to a diplomat briefed on the matter, following limited US airstrikes overnight.

Meanwhile, signs of resilience in the US labor market pushed Treasury yields higher. Job openings unexpectedly rose in September to a four-month high, while layoffs fell to their lowest level since March 2025 and quits increased.

The data may give Federal Reserve policymakers more room to focus on persistent inflation after leaving interest rates unchanged last week. The central bank raised rates in September for the first time in three years.

“For now, all signs point to a solid labor market, even if it is difficult for pockets of workers – namely those who are unemployed,” Matthew Martin, senior US economist at Oxford Economics, wrote in a note.