Investors watching the midterm election results from Wall Street were uneasy as many races still have not been called and control of Congress remains uncertain.
The stock market had been rising in anticipation of a red wave, which would have limited the capacity of President Joe Biden to further advance his legislative agenda. The Dow Jones Industrial Index fell 530 points, or 1.6%, as of Wednesday afternoon, while the technology-heavy NASDAQ fell 229 points, or 2.2%, as markets have a distaste for volatility, especially with respect to government and public policy.
The Biden administration’s first two years were marked by a number of spending packages. While the American Rescue Plan is anticipated to spend $1.9 trillion, other omnibus proposals include the $370 billion Bipartisan Infrastructure Law, the $80 billion CHIPS and Science Act, and $55 billion in aid for Ukraine. Executive orders related to health care will lead to $175 billion in new deficits, while an increase in food stamp spending will add $185 billion.
Republicans lost several high-profile races on Tuesday as several candidates failed to persuade voters, according to results curated by NBC News. Some Republican Senate candidates, including Don Bolduc of New Hampshire and Mehmet Oz of Pennsylvania, lost to their Democratic counterparts. The Georgia race between incumbent Democrat Raphael Warnock and Republican Herschel Walker will head for a runoff in a repeat of the 2020 election in the Peach State.
Republicans, however, managed to hold a handful of seats in the Senate. Ted Budd defeated Democratic rival Cheri Beasley in North Carolina, while J.D. Vance fended off Democrat Tim Ryan in Ohio. The races in Nevada and Arizona have not yet been called by any major networks at the time of writing.
Meanwhile, Republicans easily defeated their opponents in several high-profile gubernatorial races. Democrats Beto O’Rourke and Stacey Abrams were soundly eclipsed by Greg Abbott and Brian Kemp in Texas and Georgia, respectively, while Ron DeSantis defeated Democratic challenger Charlie Crist in a landslide victory that was among the bright spots for conservatives.
Most projections show that Republicans are likely to take a slim majority in the House of Representatives, while control of the Senate is yet to be determined. As of Wednesday afternoon, NBC News projects that Republicans will retain approximately 222 seats in the House of Representatives, narrowly exceeding 213 seats held by the Democrats and falling short of the significant gains Republicans were expected to achieve in the lower chamber.
A Republican-controlled House of Representatives and the election of new leadership would likely stall further legislative victories from the Biden administration. House Minority Leader Kevin McCarthy (R-CA) introduced a “Commitment to America,” which emphasizes lowering the cost of living, returning the nation to energy independence, taking seriously the economic and geopolitical threat of China, and ending violent crime waves.
The midterm elections were expected by many pundits to be a referendum on the Biden administration’s economic performance, although many commentators said on Tuesday evening and Wednesday morning that the lackluster Republican showing might be a result of poor candidate quality. The economy was the most salient concern among voters, with 84% considering the issue to be top-of-mind, according to a poll from ABC News and The Washington Post.