Futures Flip Higher After the Democratic Sweep — While Defense Stocks Slide and 846 Companies Report

Wednesday morning in US markets began with a reversal. Stock index futures, lower overnight as midterm results first came in, flipped higher by the morning: Dow futures were up about 1.8%, S&P 500 futures up about 0.9%, and Nasdaq-100 futures up about 0.2%, as investors digested a Democratic sweep of both chambers of Congress and what divided government means for the final two years of President Trump's term. The 10-year Treasury yield sat near 4.92%, down from about 4.97% on Tuesday night, and the dollar was softer. The message from the futures flip is not enthusiasm for any one policy — it is relief that the outcome is known, and a market rotating toward what a Democratic Congress changes first.

Tuesday's session itself was split, which is why Wednesday's rotation matters. The S&P 500 rose 0.36% to 7,568.92 and the Nasdaq Composite gained 0.83% to 25,372.01, both snapping three-day losing streaks, while the Dow Jones Industrial Average fell 0.38% to 51,786.72, weighed down by Apple after its results. Chip stocks did the lifting on Tuesday, and they kept doing it overnight: AMD reported record third-quarter revenue of $13.4 billion, up 45%, with data center sales nearly doubling to $8.5 billion, and guided to about $17 billion for the fourth quarter, while Arista Networks reported revenue up 58.5% to $3.66 billion, its fastest growth since its IPO, with shares last trading around $186 after hours, up about 9.5%. AMD shares were recently down about 1% in early trading despite the beat — a reminder that a great quarter does not always mean a higher stock the next morning.

The rotation: defense slides, earnings take over

The clearest losers in the early rotation were defense companies and contractors, whose shares slid as investors priced in what a Democratic Congress may mean for defense spending, data-center construction and other policy areas. That is the other side of the futures flip: a sweep does not lift everything equally, and the first trade of a new Congress is often a sector rotation rather than a broad rally. For stock pickers, the lesson of Wednesday morning is to watch which groups lead the rebound, not just whether the index rises — leadership that narrows to a few names is fragile, while leadership that broadens across sectors tends to last.

What will decide whether the rebound broadens is the sheer volume of company news landing today. Earnings Whispers counts 689 companies scheduled to report on November 4, with 276 before the open and 413 after the close; another morning brief puts the day's slate at 846 companies. Before the bell come McDonald's — analysts expect about $7.3 billion in revenue and $2.4 billion in net profit — plus Uber and CVS Health. After the close come Qualcomm, Arm and AppLovin, along with DoorDash and Instacart, which have said they plan to merge. Add in the day's data — the ISM Services PMI at 10:00 a.m. ET, forecast at 54.8 versus a previous 54.9, the ADP private payrolls report, and the September trade balance — plus the Treasury's quarterly refunding details at 8:30 a.m. ET, and Wednesday has more scheduled catalysts than most full weeks.

What the numbers underneath say

Two data points from Tuesday deserve more attention than they got. First, job openings rose to 7.52 million in September, up 333,000 from August and above the 7.15 million consensus — a labour market that is still creating openings even as hiring debates dominate headlines. Second, the 10-year Treasury yield closed Tuesday at 4.95%, up 4 basis points from 4.91%, before easing to about 4.92% on Wednesday morning; the 2-year yield finished at 4.61%, leaving the 2s10s spread at 34 basis points. Yields that stay near 5% while stocks rebound are a reminder that this rally is not being driven by cheaper money — it is being driven by earnings and by clarity about who controls Congress.

For investors, Wednesday's setup is a classic post-election test. If the futures gains hold through the ISM data and the evening earnings, and if leadership broadens beyond chips into the companies reporting today, the rebound has legs. If the gains fade and defense's slide spreads, the sweep trade will be remembered as a one-morning rotation, not a turn. Either way, the companies reporting today — from McDonald's counters to Qualcomm's chips — will say more about the economy than the election map did. Related coverage includes the indices-split story at https://zimbuck.com/blogs/1122/Indices-Split-After-Midterms-S-P-500-and-Nasdaq-Rise and the AMD earnings story at https://zimbuck.com/blogs/1079/AMD-s-Data-Center-Surge-Lifts-AI-Stocks-as-S , with the full morning brief at https://www.investopedia.com/5-things-to-know-stock-market-november-04-2026-12209181 . Follow stock market coverage on the Zimbuck News page at https://zimbuck.com/pages/zimbucknews and in the Zimbuck Market News group at https://zimbuck.com/groups/zimbuckmarketnews . Join the conversation on Zimbuck at https://zimbuck.com to say which earnings report today matters most to you.

FAQ

Why did stock futures flip higher on Wednesday morning? After falling overnight on early midterm results, futures turned higher as the Democratic sweep of both chambers became clear — Dow futures up about 1.8%, S&P 500 up about 0.9%, Nasdaq-100 up about 0.2% — as investors priced in divided government and policy clarity.

How did markets close on Tuesday? The S&P 500 rose 0.36% to 7,568.92 and the Nasdaq gained 0.83% to 25,372.01, both ending three-day losing streaks, while the Dow fell 0.38% to 51,786.72, weighed down by Apple.

Which stocks moved on earnings overnight? AMD reported record Q3 revenue of $13.4 billion, up 45%, with data center sales nearly doubling to $8.5 billion and Q4 guidance near $17 billion; Arista reported revenue up 58.5% to $3.66 billion, its fastest growth since its IPO, with shares up about 9.5% after hours.

Why are defense stocks sliding? Investors are repricing what a Democratic Congress may mean for defense spending, data-center construction and related policy — the first trade of a new Congress is often a sector rotation.

What else is due today? McDonald's, Uber and CVS before the bell; Qualcomm, Arm, AppLovin, DoorDash and Instacart after the close; plus the ISM Services PMI (forecast 54.8), ADP payrolls, the September trade balance and Treasury refunding details.

This article is market news and general information only, not financial advice.