“The fact that it’s playing out as expected gives the administration some ability to keep initiatives alive,” said Dan Deming, managing director at KKM Financial. “I think it will be positive in the near term,” but the market will soon start focusing back on issues like trade and interest rates.
NBC News was projecting the Democrats would win control of the House of Representatives. NBC News also projected the GOP would maintain control of the Senate.
Futures fell initially as Democrats took their first seat back in the House and fears of a possible “blue wave” increased. Virginia state Sen. Jennifer Wexton defeated Republican Rep. Barbara Comstock, according to NBC News projections.
But then stock futures then rebounded as more results started to come in.
“The pollsters were correct. The markets went into this, given the close, expecting this outcome,” said Quincy Krosby, chief market strategist at Prudential Financial. “Now the market is trying to figure out which sectors will do better.”
Another notable win for the Democrats came early Wednesday as Jacky Rosen won the Nevada Senate seat, beating incumbent Republican Sen. Dean Heller, according to NBC News projections.
On the earnings front, Twenty-First Century Fox is set to report results before the bell on Wednesday, while Qualcomm posts its financials after the bell.
Meanwhile, the Federal Reserve is kicking off a two-day meeting on Wednesday. Worries around the pace of interest rate hikes last month saw global markets hit with sharp bouts of volatility. Markets have been pricing in a higher probability of the Fed raising rates again in December, with further tightening seen through 2019.
In data, Mortgage Bankers’ Association mortgage applications numbers are set to be released at 7 a.m. ET, while consumer credit figures are due at 3 p.m. ET.