US stock index futures moved in different directions on Thursday as investors assessed the Democratic Party’s gains in the midterm elections, a decline in semiconductor shares and changing expectations for the conflict with Iran.
The election results gave Democrats control of both chambers of Congress, raising questions about the future direction of trade policy, artificial intelligence regulation and government spending.
Qualcomm (NASDAQ:QCOM) declined more than 8% in after-hours trading after quarterly smartphone chip revenue missed market forecasts. Semiconductor stocks also weakened in the United States and Asia amid speculation that the new congressional balance could lead to greater scrutiny of AI infrastructure investment.
Meanwhile, crude oil prices held near $95 a barrel following Wednesday’s decline of more than 8%, and investors awaited US labour market data and the Bank of England’s monetary policy announcement.
Nasdaq Futures Fall 1% While Dow Futures Gain
At 03:03 ET (08:03 GMT), Nasdaq 100 futures were down 289 points, or 1.0%, while S&P 500 futures declined 15 points, equivalent to 0.2%.
Dow Jones futures moved in the opposite direction, increasing 169 points, or 0.3%.
The mixed opening indications followed a rally in US equities on Wednesday as markets reacted to the midterm election results.
Democrats secured majorities in both the House of Representatives and the Senate, with the changes due to take effect in January.
The election outcome introduced the prospect of divided government, with Republican President Donald Trump facing a Democratic-controlled Congress.
Some analysts suggested that this political arrangement could restrict the passage of certain legislative initiatives and influence expectations for economic policy.
Democratic Congressional Victory Changes Policy Expectations
Investors considered how the election results could affect trade tariffs, government borrowing and US involvement in the conflict with Iran.
Analysts at Yardeni Research said a Democratic Congress could limit the likelihood of additional fiscal measures that might increase inflation.
The firm also suggested that political pressure could encourage negotiations aimed at resolving the conflict with Iran.
Such developments could affect energy prices and the outlook for monetary policy.
Yardeni Research additionally identified potential implications for technology companies if investment in artificial intelligence infrastructure slows.
Lower capital expenditure could support free cash flow at large technology companies, while reduced borrowing for AI projects could limit pressure on bond yields.
“Financial markets viewed the Democratic electoral gains as a positive development,” the analysts said.
The comments reflected one assessment of the election’s potential economic consequences rather than a confirmed change in government policy.
Semiconductor Stocks Retreat in US and Asian Trading
Semiconductor companies recorded declines as investors considered whether the new congressional balance might result in additional oversight of artificial intelligence development.
Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD) and Intel (NASDAQ:INTC) traded slightly lower during US extended-hours trading.
Asian technology shares also declined.
South Korean memory chip producers SK Hynix (NASDAQ:SKHY) and Samsung Electronics (USOTC:SSNHZ) registered losses.
Foxconn Technology Group (USOTC:FXCOF) fell more than 3%, while Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) declined 0.88%.
The declines followed speculation that lawmakers could examine the environmental, energy and infrastructure implications of large AI data centres more closely.
Investors continued to assess whether any additional regulation could influence the pace of future technology investment.
Texas Governor Election Adds to Data Centre Policy Questions
Analysts at Macquarie Group also highlighted the election of Democrat Gina Hinojosa as governor of Texas.
The state has attracted several major data centre projects, including facilities associated with artificial intelligence computing.
Macquarie suggested that the election could lead to more stringent rules governing these developments.
Additional requirements could affect construction approvals and project implementation.
However, no specific regulatory changes were announced in the report, leaving the potential impact on planned developments uncertain.
Qualcomm Smartphone Chip Revenue Drops 26%
Qualcomm (NASDAQ:QCOM) shares fell more than 8% in after-hours trading following its fourth-quarter earnings announcement.
The company reported revenue of $5.14 billion from its handset chip business, a 26% decline from the prior-year period.
Analysts surveyed by Visible Alpha had expected revenue of $5.25 billion, according to estimates cited by Reuters.
The shortfall came despite a more favourable forecast for Qualcomm’s data centre operations.
The contrasting performance reflected different demand conditions in consumer mobile devices and computing infrastructure.
Qualcomm’s results also drew attention to changes in global smartphone shipments and component costs.
Higher Memory Prices Affect Smartphone Market
Research firm Counterpoint reported that worldwide smartphone shipments declined by approximately one-fifth during the September quarter.
The reduction was partly associated with rising memory chip prices.
Investment in artificial intelligence data centres has increased demand for memory components, contributing to higher costs for manufacturers of consumer electronics.
The resulting increase in smartphone production costs has affected handset pricing and demand.
Qualcomm Chief Executive Officer Cristiano Amon told Reuters that Android smartphone sales appeared to have reached their lowest point and were beginning to improve.
The company’s reported handset chip revenue nevertheless remained below market expectations.
Oil Prices Hold Near $95 After Sharp Selloff
Brent crude traded around $95 per barrel on Thursday after a substantial decline in the previous session.
On Wednesday, Brent futures settled at $94.62 per barrel, down $8.98, or 8.7%.
West Texas Intermediate crude fell $7.97, equivalent to 8.3%, to close at $88.12 per barrel.
Both benchmarks finished at their lowest levels since 31 August.
The declines followed the Democratic election victories, which prompted investors to reassess the prospects for diplomatic negotiations involving Iran.
A Democratic-controlled Congress could seek greater oversight of US military operations and related spending.
Market participants also considered whether a reduction in regional hostilities might eventually improve the movement of energy shipments through the Strait of Hormuz.
The shipping route is important to global oil and gas supplies, making developments in the region relevant to international energy prices.
US Administration Addresses Iran War After Elections
President Donald Trump acknowledged that the conflict with Iran had affected Republican electoral performance.
Vice President JD Vance also raised questions about the political and economic consequences of the war.
The statements followed the Democratic Party’s gains in Congress and renewed market attention to the possibility of diplomatic efforts.
Investors considered whether the election outcome could increase pressure on the administration to pursue negotiations.
However, no agreement or confirmed change in military policy was reported.
The potential consequences for energy markets remain dependent on future political and diplomatic developments.
UK Interest Rate Decision Draws Investor Attention
The Bank of England was expected to announce a 25-basis-point increase in its benchmark interest rate on Thursday.
Such a move would represent the first rate increase in more than three years.
The anticipated decision followed an increase in UK annual inflation to 3.5% in September, its highest reading in 11 months.
Inflation remained above the central bank’s 2% target, with higher energy costs contributing to consumer price pressures.
The conflict involving the United States and Iran has affected energy supply conditions, adding to concerns about imported inflation.
Market expectations also included the possibility of further interest rate increases in 2027 if price pressures persisted.
The decision was being monitored for its implications for UK economic conditions and the broader interest rate outlook.
Investors Await US Employment Data
Alongside the political developments and company earnings, investors were preparing for the release of US employment figures later in the week.
Labour market data could provide additional information about economic conditions and the Federal Reserve’s potential policy response.
The outlook for inflation was also receiving attention following the decline in crude oil prices.
Changes in energy costs, employment conditions and government policy could influence expectations for future interest rate decisions.
Market Outlook
Thursday’s trading indications reflected different responses across sectors following the US midterm elections.
Dow futures advanced while Nasdaq 100 and S&P 500 futures declined, with semiconductor stocks affected by uncertainty surrounding AI regulation.
Qualcomm’s quarterly results highlighted reduced handset chip revenue and broader pressures in the smartphone market.
Oil prices stabilised after a sharp decline, while investors continued to assess the conflict with Iran, upcoming employment data and the Bank of England’s expected interest rate decision.
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