Stocks slid significantly Wednesday, with the Dow Jones Industrial Average plummeting nearly 650 points, as key midterm races were still being counted and cryptocurrency market fears shook investors out of a three-day rally, The Wall Street Journal reported Wednesday.
All three major indices fell, with the Dow falling 2%, the S&P 500 dropping 2.1% and the tech-heavy Nasdaq Composite Index plunging 2.5% by the end of the business day, the WSJ reported. Investors anticipated that the U.S. government would be gridlocked by Republicans gaining control of at least one branch of Congress, a status typically considered good for business, and though Republicans are still expected to gain control of the House of Representatives, their control is not expected to be as commanding as predicted. (RELATED: Republican Sen. Ron Johnson Defeats Democratic Challenger In Wisconsin, Winning Crucial Seat For GOP)
Stocks made gains over the preceding three days partly on the assumption that a Republican-controlled House, and possibly Senate, would reduce government spending and regulations through gridlock, according to CNBC Tuesday.
“Markets don’t enjoy surprises, preferring predictability,” Chief Investment Officer Aoifinn Devitt at wealth management firm Moneta, told the WSJ. “This did not transpire to be the route expected.”
Dow drops nearly 650 points as U.S. stocks log worst post-election day performance in a decade. https://t.co/OBMiF5xxPV pic.twitter.com/L9w1pOnVkj
— MarketWatch (@MarketWatch) November 9, 2022
Control of the Senate remains undecided, with races in Nevada and Arizona considered too early to call with 80% and 73% of expected votes counted, and Georgia heading to a runoff, according to NBC news at time of writing. While each party officially retains 48, Alaska’s open senate seat will be decided between a pair of Republican challengers, essentially guaranteeing the GOP a 49th seat.
The indices also fell more rapidly in the afternoon, as cryptocurrency-related stocks took a hit following the collapse of a deal between cryptocurrency exchange Binance to acquire rival FTX, the WSJ reported. Binance got cold feet, saying in a Wednesday statement that FTX’s “issues are beyond our control or ability to help.”
The decline marks the worst performance for the three major stock indices following an election day since 2012, according to MarketWatch.
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