European Shares Seen Lower As Investors Weigh US Policy Risks After Midterms

(RTTNews) - European stocks are seen opening notably lower on Wednesday after early results showcased significant gains for Democrats in the 2026 U.S. midterm elections, threatening President Donald Trump's legislative agenda and paving the way for new investigations into his administration's policies.

It is feared that Democrats' control of both chambers of Congress will result in tighter regulations and a closer scrutiny of the tech-heavy sectors, including artificial intelligence companies.

Asian markets were mixed despite U.S. technology stocks rebounding overnight. Japan's Nikkei was down more than 3 percent as markets opened after a public holiday.

South Korea's Kospi was down more than 2 percent due to investor anxiety over AI industry and unresolved geopolitical risks.

Mainland Chinese and Hong Kong markets were little changed as a crushing defeat for U.S. President Trump in the midterm elections opened the door to legislative deadlock.

Gold jumped 0.6 percent to $3,955 an ounce, driven by a softer dollar and lower Treasury yields.

The U.S. dollar dropped against all of its Group-of-10 peers while the benchmark 10-year Treasury note declined seven basis points to 4.89 percent as a commanding "blue wave" forced traders to rethink Trump's remaining policy agenda and the political trajectory into 2028.

Brent crude futures were up half a percent at 104.12 a barrel after seeing sharp swings in the previous session amid uncertainty over the U.S.-Iran peace talks.

Qatar said it saw hope for an interim deal as both the U.S. and Iran evaluate new proposals put forward by mediators, despite fresh U.S. strikes and continued threats to shipping through Hormuz.

However, Iran's national security chief indicated in a social media post that Washington's response to Iran's demands for reopening the Strait of Hormuz and resuming peace talks was insufficient.

Trump told Fox News on Tuesday that he is "not looking to kill lots of people" in Iran following the midterm elections, but warned Washington would act decisively if needed.

Overnight, U.S. stocks ended mixed as Treasury yields rose on the back of stronger-than-expected employment data and focus shifted to the midterm elections.

Oil prices slipped to multi-week lows despite skepticism about a near-term resolution to the Iran conflict.

While a three-day sell-off in technology shares came to a halt, Apple shares fell nearly 2 percent after the company warned about rising memory costs and slower services growth.

On the economic front, job openings and hiring showed slight signs of improvement in September while layoffs fell to the lowest level in 1-1/2 years, adding to signs of resilience in the labor market.

Separate set of data showed new orders for U.S. factory goods increased more than expected in September.

The S&P 500 gained 0.4 percent and the tech-heavy Nasdaq Composite surged 0.8 percent while the narrower Dow dropped 0.4 percent.

European stocks closed lower on Tuesday amid doubts over a potential Middle East deal after the U.S. military carried out limited strikes on Iran's Qeshm Island.

The pan-European STOXX 600 fell 0.6 percent. The German DAX dipped half a percent, France's CAC 40 eased 0.3 percent and the U.K.'s FTSE 100 lost 1.1 percent.