Morning Brew November 4 2026

Good morning.

Blue Wave and No $5,000 Initial 2026 U.S. midterm results point to a strong Democratic victory, with the party projected to take control of both the House and Senate. Republicans suffer painful losses in Ohio, North Carolina, South Carolina, Kansas and Iowa.

Markets initially react in a risk-off fashion. The S&P 500 stands at 7,540, down 0.5%, while Nasdaq-100 futures fall around 1%. Technology and AI-related stocks are particularly weak. Investors move into Treasuries, pushing the 10-year yield down roughly 5 basis points to 4.90%.

The U.S. Dollar Index falls to 101.40, while EUR/USD rises to 1.1235. USD/JPY trades at 157.95 and GBP/USD at 1.3460. Gold stands at $4,000 and silver at $51.

The reaction suggests that investors are pricing in greater regulatory pressure and stronger constraints on the Trump administration’s legislative agenda.

Novo Nordisk beats estimates and raises the forecast this morning

Democrats capture majorities in both the Senate and House, delivering sweeping victories that extend deep into Republican strongholds, including Kansas, South Carolina, Texas and Iowa. The scale of the Democratic wave is still coming into focus.

President Trump rejects the idea that the results represent a rebuke of his presidency. “It was a point in time, and I wasn’t on the ballot,” he says.

Charu took a look at the implications:

US Midterms 2026: Investor Q&A on the Democratic sweep

1. Gridlock replaces the stimulus narrative. A Democratic Congress would constrain Trump's ability to pursue additional fiscal expansion and legislative tax measures. But it cannot simply reverse the president's entire economic agenda. Executive powers, existing legislation and presidential vetoes remain important.

2. AI faces a higher hurdle, not an extinction event. Greater scrutiny of AI regulation, data centres, energy costs and investment incentives arrives when investors are already questioning the returns on enormous AI spending. This could accelerate the shift from broad AI exposure towards companies with strong cash flows, pricing power and visible returns on investment.

3. The biggest opportunities could lie outside the crowded US technology trade. Lower Treasury yields and a softer dollar could support gold, selective emerging markets, Asian equities and bond duration. But investors should avoid treating every initial market move as a lasting trend, especially given the risks from inflation, geopolitics and corporate earnings.

Yesterday, the S&P 500 closed 0.4% higher at 7,568.92, while the Dow fell 0.4% to 51,786.72 and the Nasdaq 100 gained 0.7% to 28,184.

Nvidia rose 2.9% and overtook Apple as the world’s most valuable company. Apple fell 1.9% following a margin warning, while Shopify dropped 13.6% after revenue and gross merchandise volume missed expectations.

After hours, Arista Networks jumped around 13% on a strong fourth-quarter revenue forecast. AMD gained 5.5% and Super Micro rose 8% on upbeat guidance. AMD later advanced 8% in extended trading after forecasting faster-than-expected growth in 2027.

The Stoxx 600 closed 0.6% lower at 645.66, while the DAX fell 0.45% to 25,864.62. The FTSE 100 dropped 1.1% to 10,638.43, its biggest one-day decline since 1 October. HSBC fell 2.0%, ASML lost 1.6% and Zalando dropped 6.3%. Bayer was a bright spot after raising its full-year EBITDA outlook following stronger-than-expected third-quarter results.

Iran and the United States remain far from an agreement to end their war. President Trump declines to rule out renewed U.S. combat operations following the midterm elections. Trump also announces an agreement with Israeli Prime Minister Benjamin Netanyahu under which Washington will end $4 billion in annual funding to Israel after this year, while continuing to sell weapons to its close Middle Eastern ally.

Ole`s take on commodities after the midterm: 

• US midterms response across key commodities: The Democrats' historic election victory has triggered an initial reassessment of US fiscal, trade and foreign policy, with precious metals emerging as the clear winners.
• Precious metals: Gold and silver have rallied, supported by a softer dollar and lower Treasury yields amid expectations that a Democrat-controlled Congress could constrain Trump's fiscal agenda and limit further, increasingly unaffordable fiscal expansion. Short covering has added momentum after gold reclaimed key resistance at USD 3,970, potentially setting up a challenge of the downtrend in place since August.
• Copper: Prices trade lower but off their lows as traders reassess AI-related demand prospects and whether Trump's defeat, combined with voters' focus on affordability, has reduced the likelihood of US import tariffs on refined copper. Such a shift could ease short-term supply distortions and potentially release US-held inventories back onto the global market, while longer-term supply constraints remain supportive.
• Energy: Oil prices have staged a modest rebound following a two-day slump as traders weigh conflicting signals over the prospects for US-Iran peace talks. Adding to the uncertainty is how Trump may respond on the foreign policy front, where his executive powers remain considerable despite a resounding electoral rebuke driven by voter frustration over the cost of living and the war in Iran. With his domestic agenda now facing greater congressional resistance, the risk of a more assertive stance abroad cannot be ignored, keeping geopolitical uncertainty firmly in focus. 

The election result points to greater political gridlock, closer scrutiny of AI investment and potential support for bonds, gold, selected emerging markets and Asian equities. Traders and investors ill now assess risks and opportunities from the election.

In Terms of data we are expecting the European inflation and US PMI

Wednesday, 4 November 2026
Macro: China services PMI; U.S. ADP employment report and ISM Services PMI.
Corporate earnings: Novo Nordisk, Toyota, Qualcomm, Arm, McDonald’s and Uber.

Thursday, 5 November 2026
Macro: Australia trade balance; U.S. initial jobless claims.
Central banks: Bank of England rate decision and Monetary Policy Report.
Corporate earnings: Sony, ConocoPhillips, Cloudflare, Parker-Hannifin and Southern Company.

Friday, 6 November 2026
Macro: Euro-area retail sales; U.S. nonfarm payrolls, unemployment rate and average hourly earnings; Canada employment report; preliminary University of Michigan consumer