International financial markets reacted on Wednesday to the Democratic Party’s victory in the United States legislative elections, which gained control of both chambers of Congress, complicating President Donald Trump’s economic agenda.
Gold and silver prices rose sharply, the dollar depreciated, and technology stocks and cryptocurrencies were affected by fears of stricter regulations, Reuters and CNBC report, cited by News.ro.
Follow, HERE, the most important information and events from the crucial US elections
Main trends in international markets after the US vote:
- Spot gold increased by 2.97%, to $4,044.90 per ounce.
- Silver rose by 4.27%, to $51.90.
- Platinum appreciated by 3.38%.
- Palladium by 5.57%.
- The US dollar index declined.
- Government bond yields decreased amid uncertainties regarding Washington's future fiscal policy.
- Futures contracts for the S&P 500 index lost 0.5%, and those for Nasdaq fell by 0.8%, after initially recording larger losses.
Reaction of Asian markets:
- Shares of the Japanese chip manufacturer Kioxia fell at one point by 15%.
- SoftBank shares dropped by 10% before recovering part of the losses.
- In contrast, the Chinese SSE Star 50 index rose by 10%, supported by local semiconductor companies.
Cryptocurrencies also recorded initial declines. Bitcoin lost up to 2.79%, falling to $75,666, and ether depreciated by 1.9% to $2,248, before both recovered their losses. Investors fear that the new Congress will adopt a more restrictive stance towards digital assets.
Artificial Intelligence in the Hands of Politics
Investors anticipate that the new Democratic majority will intensify oversight of artificial intelligence companies, the banking sector, and the cryptocurrency market.
"There are still numerous areas where President Trump can influence markets, including trade, tariffs, foreign policy, and existing regulations," said Tai Hui, chief Asia-Pacific strategist at J.P. Morgan Asset Management.
However, he emphasized that the Democrats do not seem to have obtained the two-thirds majority necessary to override presidential vetoes, which could cause legislative deadlocks in the last two years of Trump's term.
The artificial intelligence sector is among the most exposed to political changes. The Democrats' victory in states like Texas and Georgia, where significant investments in data centers are concentrated, could lead to stricter controls and slow down some projects. "I don't think this stops the entire momentum of artificial intelligence, but it slows it down," said Tapas Strickland, chief strategist at Moomoo ANZ.
"The risk is related to stricter regulation of the AI and crypto sectors," said Nick Ferres, chief investment officer at Vantage Point Asset Management.
Tensions and Uncertainty
On the precious metals market, Rhona O'Connell, director of analysis at StoneX, believes that the Democratic victory may support gold through dollar depreciation and lower bond yields.
However, she warned that the outlook is complicated by the Federal Reserve's restrictive monetary policy and the war in Iran.
"Disputes over fiscal policy and institutional tensions will generate uncertainty," said O'Connell.
Analysts warn that deadlocks between the White House and Congress could affect budget negotiations and amplify concerns over US public debt. At the same time, Trump retains significant powers in trade and foreign policy, including the ability to impose certain tariffs without Congressional approval.