04 Nov 2026, 01:10 PM

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Democrats’ capture of Congress raise expectations of tougher regulation of AI sectorGood morning, and welcome to our rolling coverage of business, the financial markets and the world economy.The dollar has hit a one-month low, US stock futures are down and gold rose after the Democrats won control of Congress, increasing expectations of tougher regulation of the AI sector.There’s been a rally for US Treasuries as well, given that divided government has generally made it harder for fiscal stimulus to be passed. So that’s eased concerns on the fiscal trajectory a bit.Investors are also pricing in a more dovish path for the Federal Reserve too, with the amount of rate hikes priced by the June 2027 meeting down 3.3bps this morning to 55bps. So that’s pushed the dollar index down.The magnitude of the gains for the Democrats in the midterms does not change too much for the near-term policy outlook, given the party still lacks a filibuster-proof majority in the Senate and President Trump has veto power to block legislation.But the Democrats will now hold Senate seats in many typically red states for the next six years, which increases their chance of being able to enact more sweeping legislative changes if they win the next presidential election. That includes the potential for tax hikes on corporations and high-income individuals as well as regulation that could delay the AI rollout.9am GMT: S&P Global Eurozone services and composite PMIs for October9.30am GMT: UK services and composite PMIs for October10am GMT: Eurozone inflation flash for October1.15pm GMT: US ADP Employment change for October1.30pm GMT: US Trade for September3pm GMT: US ISM Services for October Continue reading...

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