Democrats sweep US midterms as stock futures slide and investors move into Treasurys

What matters today

1. Democrats won control of the House and Senate, and US stock futures fell overnight as markets reacted to the result.
2. Tesla and SpaceX fell over 4% in premarket trading (before the regular session opens), while AI-related stocks were mixed.
3. Investors bought Treasury bonds for safety overnight, pushing yields lower after the 10-year closed Tuesday at 4.95%, up from 4.91%.
4. Iran remains a risk: Iran's IRGC says four tankers were destroyed by mines south of Hormuz, and reports on US-Iran talks conflict.
5. Euro zone inflation reached 4.0% in October as expected, the first time at that level since September 2023, adding pressure on the ECB.

Overnight

US stock futures slid as results showed a broad Democratic win, with Treasury yields falling as money moved into bonds. In Asia, stocks also slid, China's yuan fell to a two-week low, and New Zealand's unemployment rate rose to 5.7%, an 11-year high. Euro zone headline inflation hit 4.0% in October while core inflation, which strips out volatile food and energy prices, held at 2.5%. Company news included a planned CVS breakup, an earnings beat at McDonald's with lower US restaurant traffic, and a raised outlook from Novo Nordisk.

Top headlines

• Tesla and SpaceX drop more than 4% before the open after Democratic gains; AI names trade mixed.CNBC Top News ↗
• Bond buying for safety lowered Treasury yields overnight as equity futures sold off on election results.CNBC Top News ↗
• Asia stocks slide after the midterms; Iran's IRGC reports four tankers destroyed by mines south of Hormuz.ForexLive ↗
• Crude oil steadies after a selloff as reports on US-Iran nuclear negotiations conflict and escalation risk grows.ForexLive ↗
• Euro zone October inflation hits 4.0% as forecast, core steady at 2.5%, raising pressure on the ECB.ForexLive ↗
• CVS plans to separate its drugstore business, undoing the healthcare conglomerate built through its Aetna purchase.CNBC Top News ↗
• AMD rises 8% after hours on better-than-expected results, with data center revenue nearly doubling on AI chips.CNBC Top News ↗
• McDonald's tops earnings estimates, though visits to its US restaurants declined during the quarter.CNBC Top News ↗