Midterm Result Reshapes Tech and Energy Outlook as Fed Holds and BoE Decision Looms

Democratic control of Congress weighed on chip and energy stocks while renewables gained, with the Fed on hold at 3.75%-4% and a Bank of England rate rise widely expected today.

Maz Vantage · 5 Nov 2026

Wall Street and the midterm result

The Democratic win in the US midterm elections, in which Republicans lost control of both the House and the Senate, is shaping market debate. The Guardian reports that analysts see a more unpredictable final two years of the Trump presidency, with possible implications for stocks, growth, inflation and government borrowing costs (The Guardian).

Technology was the sensitive area. MarketWatch said Micron and other chip stocks slipped on Wednesday because the results raise long-term questions about the AI and data-center buildout, though analysts quoted noted they do not "unwind projects already funded" (MarketWatch). RTTNews said European tech shares could face pressure over concern that a Democratic-led Congress might push for tighter regulation of AI development and data-center construction (Nasdaq/RTTNews). Another MarketWatch piece described energy stocks such as Vistra as having been under pressure, with some analysts calling the reaction "excessive knee-jerk" (MarketWatch). In contrast, The Guardian said the market value of renewable energy developers rose across financial centres as the results came in (The Guardian).

The Federal Reserve

At its 28 October meeting the Fed held the federal funds target range at 3-3/4 to 4 percent. The statement described economic activity as expanding at a strong pace and inflation as still elevated. The vote was 10-2: Lisa D. Cook and Beth M. Hammack preferred a quarter-point increase (Federal Reserve).

Company news

Among large US companies, Bloomberg News reported, according to RTTNews, that Apple is cutting employee budgets for AI tools to contain costs while still encouraging wider use (Nasdaq/RTTNews). MarketWatch said Qualcomm's stock fell on the prospective loss of Apple's business and the effect of high memory costs on smartphone demand (MarketWatch), while AppLovin, described as this year's worst-performing S&P 500 stock, rose after earnings that MarketWatch called "clearly positive" (MarketWatch). Figma's stock dipped as investors weighed the cost of delivering AI features (MarketWatch).

Asia and Europe

In Japan, Toyota reported higher first-half profit and revenue, raised its profit outlook and trimmed its revenue outlook (Nasdaq/RTTNews). Sony reported a jump in second-quarter profit helped by film and PlayStation (Investing.com).

In Europe, shares were expected to open mostly higher in cautious trade (Nasdaq/RTTNews). German industrial orders rose 4.4% in September (Investing.com). Commerzbank confirmed its 2026 profit and revenue outlook but trimmed its net interest income view, citing stronger competition for deposits (Nasdaq/RTTNews).

Central banks and currencies

The Bank of England decides on rates at 12:00 GMT today. Most analysts expect Bank Rate to rise from 3.75% to 4%, which would be the first increase in more than three years; UK CPI inflation was 3.5% in the year to September, which BBC attributes largely to fuel costs linked to the Iran war (BBC). Ahead of the decision the pound reached its joint highest level against a basket of currencies since the 2016 Brexit referendum, and stood at $1.3495 and EUR 1.1979 early on Thursday (BBC).

The ECB said on 29 October that President Christine Lagarde will step down on 7 February 2027 (ECB). Its wage tracker points to slightly higher wage growth in the first three quarters of 2027 than in the full year 2026 (ECB).

Sources

Wall Street and the midterm result

The Federal Reserve

Company news

Asia and Europe

Central banks and currencies