European stock index futures fell as Democrats won control of both chambers of Congress in the US midterms, raising concerns over tighter regulatory scrutiny of technology and artificial intelligence companies. Euro Stoxx 50 futures declined 0.52% in early London trading, recovering from a 1.5% drop. The Democrat landslide reflected voter discontent with the economy and the Iran war, while Treasuries rallied on expectations of limited tax and spending plans.
European equities had outperformed the US market recently, driven by a rotation away from AI stocks into defensive sectors. Investors are watching the outlook for the Iran war and potential policy shifts affecting the tech sector. Some newly elected officials oppose data center expansion, threatening AI capital expenditure.
A UBS Group AG basket of AI-benefiting stocks fell 11% last month as investors hedged risks. Wolf von Rotberg of Bank J Safra Sarasin noted that wins in states like Texas could slow data center construction, impacting the AI cycle. Trump’s concession removed political uncertainty, offering market relief.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing