Dollar Slides as Democrats Gain in Midterms

Investors moved out of the dollar and into US Treasuries as early midterm results showed Democrats making gains.

Updated on Nov. 4, 2026 in Stock Markets

Dollar Slides as Democrats Gain in Midterms

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The US dollar fell sharply against major currencies on Wednesday as early results from the US midterm elections showed Democrats making gains. Investors sold stocks, moved away from the dollar and sought US Treasuries.

Why it matters

Early midterm results showed Democrats making strong gains in their bid to control Congress, and prediction markets indicated growing expectations of a Democratic sweep. Traders are also weighing how a shift in Congress could affect government spending and US policy toward Iran and the Middle East.

The euro rose 0.5% to $1.1249 and the yen strengthened 0.7% to 157.63 per dollar, while the dollar index fell 0.3% to 101.4. Final control of Congress remains unresolved as results continue to come in.

The players

Annie Andrews

Annie Andrews is a Democrat who won South Carolina's Senate seat, defeating Republican Darline Graham.

Roy Cooper

Roy Cooper is a Democrat who won the North Carolina race in the 2026 midterm elections.

The details

Investors sold stocks, moved away from the dollar and sought US Treasuries as Democrats won key races. Democrat Annie Andrews defeated Republican Darline Graham in South Carolina's Senate race, and Democrat Roy Cooper won in North Carolina.

Wednesday, November 4, 2026: The dollar fell sharply as early midterm results emerged.

Market Dynamics

Democratic gains in South Carolina come against Trump's 18-point margin there in 2024, a sign of shifting political ground in a state he carried comfortably. Carol Kong warned that a Democratic sweep would limit government spending over Trump's term.

Investors moving between the dollar and US Treasuries can see their currency exposure and bond holdings shift as election results come in. A Democratic sweep of Congress could change federal spending expectations that affect bond yields and portfolio allocations.

The takeaway

Election-night results can move currencies and bonds quickly, so keep an eye on how the final congressional outcome shifts spending expectations. Diversifying currency and bond exposure can help limit the impact of sudden political-driven market moves.