NEW YORK — Oil, computer-chip stocks and the dollar came under pressure in Asia on Thursday while most other markets rose, after U.S. voters swept Democrats to a series of stunning midterm wins, a result that raised hopes for an end to the war with Iran, according to Reuters.
Brent crude futures, the main global oil price, dived nearly 9 percent overnight and fell below $100 a barrel, according to Reuters. Brent has dropped about 20 percent so far this week. If that holds until Friday’s close, it would be the largest weekly fall in oil prices since a week in April 2020, when U.S. crude briefly fell below zero during the pandemic.
Why cheaper oil lifted other markets
The sharp fall in oil prices eased pressure on some of Asia’s stock markets, including India, Malaysia and Hong Kong, according to Reuters. Falling energy prices also encouraged a rally in government bonds, which pushed yields — the interest governments pay to borrow — lower, and pulled the dollar down. The S&P 500, a broad index of large U.S. companies, closed 1.6 percent higher, and European shares reached a two-month high. The yield on the benchmark 10-year U.S. Treasury fell to 4.87 percent.
Traders were betting that Trump, facing a Democratic Congress and hurt politically by high energy prices caused by the Middle East conflict, would be less likely to escalate the war with Iran, according to Reuters. Trump acknowledged on Wednesday that the war played a role in his party’s defeat, and Vice President JD Vance was blunter in a post on X, according to Reuters.
Chip and data-centre stocks fall
Not every stock rose. Chipmakers fell sharply again, with South Korea’s KOSPI index down 4.8 percent and Taiwan stocks down 2.6 percent, as investors worried about the fate of the huge spending on data centres, the large buildings full of computers that power artificial intelligence, according to Reuters. Solar energy stocks jumped the most, in the expectation that Democrats will boost support for renewable energy, while shares in data-centre companies and their suppliers fell on expectations of tougher rules.
Democratic candidates who campaigned in part on pausing new data-centre construction won notable victories in Texas and Georgia, a sign that public opinion on artificial intelligence infrastructure is shifting, according to Reuters.
What happens next
Investors call the expected Washington outcome “gridlock” — a divided government that finds it hard to pass big new laws. Many see that as steady for markets, though it can also block action in a crisis. Attention now turns to a policy decision by the Bank of England and to talks later this month that could decide whether the war in the Middle East winds down.
Read the Reuters report: Oil and data centre stocks sink after US midterms.
