Election Day Opens With the AI Trade Buckling Again — and Brent Back Above $105

Sorry to disappoint if you were hoping for any calm before the storm — that is how Reuters' Morning Bid opened Election Day, and the screens backed it up. With voting about to begin in the U.S. midterm elections, the AI trade buckled again in Asian trade: tech hardware suppliers sank, sending MSCI's broadest index of Asia-Pacific shares outside Japan down 1.4 percent to the lowest level in a week and a half.

The softness travelled west. S&P 500 e-mini futures edged lower for a fourth consecutive day, off 0.1 percent, Japanese markets were closed for a holiday, and in early European trades pan-region futures fell 0.9 percent, German DAX futures slid 0.8 percent and FTSE futures were 0.2 percent lower. Apple shares were still carrying Monday's 2.8 percent after-hours fall.

Oil held its Election Day premium. Brent crude was 0.4 percent higher at $105.19 in Asian trading as investors weighed the state of peace talks between the United States and Iran — talks shadowed by the confirmed U.S. strikes on Iran's Qeshm Island in the Strait of Hormuz, which a U.S. official confirmed to Reuters on Monday. Australia provided the day's first central-bank verdict: its shares bucked the regional trend, rising 0.3 percent, and the Aussie dollar slipped 0.2 percent after the Reserve Bank of Australia lifted its cash rate target by 25 basis points to a near two-decade high of 4.85 percent in a split six-to-three vote.

Underneath every move sits the vote itself. Opinion polls favour the Democrats to win the House, though the Senate remains too close to call, and prediction markets Polymarket and Kalshi assign probabilities of 77 and 76 percent respectively that Democrats will control the Senate — numbers traders are treating with extra caution after being wrongfooted during Brazil's presidential election. By tomorrow, as ING put it in the earlier wrap, the market will have guidance on the midterm implications. Today it has only the waiting.