Traders work on the floor of the New York Stock Exchange (NYSE) on October 27, 2022 in New York City. Stocks continued their upward gains Thursday with the Dow rising nearly 400 points following a new GDP report that beat expectations.
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Stock futures were lower — following recent market gains — as results of the midterm elections dragged on with control of the U.S. House of Representatives and Senate still up in the air.
S&P 500 futures fell by 0.22%, while Dow futures were down 90 points. Futures for the Nasdaq 100 traded fractionally lower.
Stocks are coming off three-straight days of gains and so possibly were due for a pause. The Dow climbed 333 points on Tuesday for its third-straight session of gaining more than 1%. The bounce for equities may be partly due to the elections, where Wall Street was expecting Republicans to gain ground and create gridlock in Washington, D.C.
But control of the houses of Congress were not clear overnight so far.
Morgan Stanley chief U.S. equity strategist Mike Wilson said on CNBC’s “Closing Bell” that if it does end up being divided government it could help ease concerns about inflation and higher interest rates going forward.
“It looks like the House will go the way of the Republicans,” Wilson said. “That means gridlock. Probably, less fiscal spending will be achieved.”
The market’s recent rally is occurring at the front end of a strong seasonal period. Historically, stocks tend to rise after midterm elections and the policy clarity it brings, and the final two months of the year are considered a bullish period for investors.
One stock that weighed on futures was Disney, which fell more than 6% in extended trading after the entertainment giant missed estimates on the top and bottom lines for its fiscal fourth quarter.