US midterms: how the vote could shape Asian markets this week

what happened

Asian markets are preparing for the results of the US midterm elections, which, according to Dow Jones Newswires, could determine the direction of American policy on tariffs, fiscal measures, AI spending and the Middle East. Prediction markets see Democrats winning both the House and the Senate as the most likely outcome, which could make it harder for the administration to push through its agenda. Eric C. Robertsen of Standard Chartered Bank says such a result could weigh on equities, Treasury yields and the dollar, given possible pushback against AI and data centers.

MUFG strategists see a divided government as the most market-friendly outcome, with Republicans holding the Senate and Democrats the House, because it would limit policy changes and preserve AI investment. Asian chipmakers and semiconductor-equipment makers are closely tied to US AI spending, so a cut in customer plans would hit their earnings, said Ninghui Liu of State Street Investment Management. Asian currencies are expected to react differently depending on energy-import dependence, external balances and tech exposure, while ING says the dollar will still respond mainly to Federal Reserve rate expectations.

why it matters

For Asian markets the bigger risk may be oil rather than the election result. The region imports much of its energy, and analysts say high oil and commodity prices will persist regardless of how the US vote turns out.

market impact

• ▼US stocks pressure down — pushback against AI and data centers under a Democratic sweep
• ▼US Treasuries pressure down — a slightly weaker US growth outlook after a decisive Democratic win
• ▼Dollar index pressure down — possible confrontation between Trump and Democrats and a weaker growth outlook

instruments