U.S. stock futures rose slightly in volatile overnight trading on Tuesday night as results of a widely anticipated midterm election started to trickle in. Early indications pointed to a lack of a so-called blue wave, which was feared by investors worried about a Democratic clampdown on President Donald Trump’s business-friendly agenda.
NBC News was projecting an 95 percent chance the Democrats would win control of the House of Representatives. It appeared likely the Republicans were able to keep control of the Senate.
Dow Jones Industrial Average futures rose 69 points as of 10:02 p.m. ET. S&P 500 and Nasdaq 100 futures also traded higher. Dow futures climbed more than 100 points earlier in the evening when it appeared Republicans had a chance of keeping the House as well.
“It seems like what we expected thus far: It looks like the Republicans will take the Senate and the Democrats will take the House,” said Ryan Detrick, senior market strategist at LPL Financial.
Futures fell initially as Democrats took their first seat back in the House and fears of a possible “blue wave” increased. Virginia state Sen. Jennifer Wexton defeated Republican Rep. Barbara Comstock, according to NBC News projections.
But then stock futures then rebounded as more results started to come in.
Futures increased as Republican Mike Braun was projected to unseat Democratic Sen. Joe Donnelly in Indiana, according to NBC News. Wall Street investment bank Cowen called this race “the first bellwether Senate seat,” adding in a report sent to clients before the election that “if the GOP wins, their majority is very safe.”
Equities in the U.S. closed higher on Tuesday as the elections began earlier in the day.
Pollsters and election experts expect the Democrats to take control of the House and Republicans to keep a slim majority in the Senate. Stocks typically do well when Congress is split and the White House is under Republican control. In those instances, the S&P 500 averages an annual return of 12 percent, according to Bank of America Merrill Lynch.
The other two possible outcomes are the GOP maintaining control over the two chambers and the Democrats sweeping both the House and Senate.
The outcome of these elections has massive implications for investors as it will influence which policy initiatives Congress will pursue or will block. Some of the key areas that will be affected by these outcomes include drug pricing and banking regulation.