Republicans Expected Red Wave Failed to Swell, Stocks Drop

Barry Adams
09 Nov, 2022
New York City

Stocks on Wall Street fell after midterm elections results showed tight races for the U.S. Senate and the U.S. House. 

The expected Republican wave failed to materialize and dashed the hopes of a strong Republican majority in the House and significant gains in the Senate. 

With several key races still not declared, Republicans are expected to have less than a five-member majority in the House and may not win a majority control of the Senate. 

Historically, the party in charge of the House and the Senate suffers losses in midterm elections. However, Democratic Party voters appear to be more engaged and showed higher-than-usual election participation. 

Several extreme right candidates promoted by the former president Donald J Trump failed to win, jeopardizing Trump's platform and possible run for the 2024 presidential race.  

The S&P 500 index declined 0.9% to 3,794.09 and the Nasdaq Composite index dropped 1.1% to 10,498.02. 

Crude oil fell $1.55 to $87.30 a barrel and natural gas fell 33 cents to $5.77 a thermal unit. 

Bond market took election results in stride and traded sideways and shifted focus to the upcoming inflation data on Thursday. 

The yield on 2-year Treasury notes declined to 4.66%, 10-year notes eased to 4.48% and 30-year bonds declined to 4.26%. 

Meta Platforms jumped 6.8% to $102.94 after the company said it plans to layoff more than 11,000 workers. 

Meta employs about 87.000 around the world and CEO Mark Zuckerberg said in a letter to employees his growth expectations were too high and the company needs to recalibrate its costs.

Walt Disney Company dropped 11.2% to $88.70 after the company missed its earnings expectations for its fiscal fourth quarter. 

Roblox Corp dropped 13.04% to $34.01 after the video game developer reported a larger-than-expected third quarter loss of 50 cents a share and net bookings of $702 million were ahead of expectations.