Democrats delivered a blue shellacking in Tuesday’s midterm elections, reclaiming control of the Senate and putting the party on pace to recapture the House, as voters voiced their discontent over President Trump and prepared to usher in a new era of divided government during his final two years in office. The election results represented a voter response to high inflation, inflated fuel prices, the Iran war launched by Trump and his and trade fights with allies. Exit polls showed deep voter discontent with the economy and unhappiness with Congress. Republicans lost Senate seats in North Carolina, South Carolina, Texas, Ohio, Kansas and Iowa, according to the Associated Press, giving Democrats a Senate majority via a map full of typically Republican terrain. With the exception of North Carolina, Trump won all of those states by double digits in the 2024 election. Democrats had needed a net gain of four seats to reclaim a majority. Voters were particularly frustrated with the president’s use of tariffs, undertaking the Iran War and an aggressive deportation strategy.

On Tuesday, the SMI declined by 0.4 percent to 14,743 points. Pharmaceutical heavyweights Novartis (virtually unchanged) and Roche (-1.6%), which had already been hit by heavy selling on Monday, were unable to hold onto their initial gains. Nestlé, another heavyweight considered a defensive stock, closed 0.3 percent lower. Stocks in the construction sector, which had led the market at the start of the week, were now sold off. Amrize, Geberit, and Sika gave up between 0.7 and 2.2 percent. Geberit had reported earnings which were described as solid by traders. Market participants attributed the price decline to profit-taking. Holcim outperformed the market, adding 0.1 percent. Following the surprise resignation of its CFO, Galderma dropped 1.3 percent. CFO Luigi La Corte had taken office just a few months earlier. Among the top performers was ABB, having risen 1.6 percent on no particular news. Among smaller caps, Sonova shed 1.3 percent. UBS had downgraded the stock to “Neutral.” Clariant advanced by 1.4 percent. Its third-quarter earnings had fallen short of expectations, as noted by analysts at J.P. Morgan. However, the company’s statement regarding fourth-quarter orders was encouraging.

Europe
European stock markets lost ground on Tuesday. According to FactSet data, the Stoxx Europe 600 index shed 0.6%, closing at 645.66 points. In Paris, the CAC 40 and the SBF 120 each gave up 0.3%. In Frankfurt, the DAX 40 dropped 0.5%, and the FTSE 100 declined by 1.1% in London. BIOMERIEUX (+4.8%): The in vitro diagnostics specialist confirmed on Tuesday its financial targets for 2026—which had been lowered last April—after reporting third-quarter revenue that exceeded analysts’ expectations, driven in particular by its non-respiratory test panels. ALSTOM (-4.8% to 11.13 euros): Several analysts revised their forecasts for the rail equipment manufacturer on Tuesday in response to the severe profit warning issued on Monday. On Monday, Alstom’s stock had plummeted 26.1%. MEDINCELL (+3.4%): The biotech company confirmed on Tuesday that its Israeli partner, Teva Pharmaceuticals, had upgraded—for the second time this year—its revenue forecast for Uzedy in 2026, as sales of their antipsychotic drug in the United States exceeded analysts’ expectations in the third quarter. RUBIS (+1.3%): The petroleum products distribution group reiterated its financial targets for 2026 on Tuesday, having benefited from a further increase in volumes and margins in the third quarter. BAYER (+3.6% in Frankfurt): The German company lifted its full-year earnings forecast, citing a recovery in its pharmaceutical division after strong demand for its key drugs allowed the company to offset market pressures on its agricultural and consumer health divisions.

United States
U.S. stocks finished mixed on Tuesday. The Dow Jones Industrial Average fell 197.26 points, or 0.38%, to 51786.72. S&P 500 gained 27.52 points, or 0.36%, to 7568.92 and the tech-heavy Nasdaq Composite rose 207.65 points, or 0.83%, to 25372.01. APPLE (-1.9%): The iPhone manufacturer reported better-than-expected results for the fourth quarter of its fiscal year (which runs on a different schedule) but warned that soaring prices for certain components are expected to weigh on its gross margin during the current quarter. With this decline at the close, Apple ceded its position as the U.S. company with the highest market capitalization to chipmaker NVIDIA (+2.3%). NVIDIA now has a market capitalization of $4,980 billion, compared with $4,840 billion for Apple. ORACLE (+5.8% to $126.2): The stock rebounded the day after a drop following the launch of a $20 billion bond and stock offering to finance its artificial intelligence projects. INTEL (+0.9%), MICRON TECHNOLOGY (+2.6%), NVIDIA (+2.3%): chipmakers are trying to recover after plunging for the second consecutive session on Monday. In this sector, ON SEMICONDUCTOR (+3.8%) benefits from better-than-expected quarterly results. SANDISK (+4.8%), SEAGATE TECHNOLOGY (+2.1%), WESTERN DIGITAL (+2.6%): Storage solution providers are also rebounding after another difficult session on Monday for artificial intelligence-related stocks. Optical networking company COHERENT (+3.3%) and server manufacturer SUPER MICRO COMPUTER (+3.1%) are also regaining ground. DUPONT (+8.6%): The chemical company raised its full-year guidance after returning to profitability in the last quarter, supported by industrial demand and improved profitability.

Asia
Asian indexes diverged for the Wednesday trading session. The heavily technology-weighted Seoul stock exchange was down 0.3 percent, although the decline narrowed significantly as the trading session progressed. Samsung Electronics shed 2.7 percent, and SK Hynix dropped 3.7 percent. In Tokyo, the Topix 500 gave up 1.5 percent following Tuesday’s holiday. Shares of Japan’s most valuable chipmaker, Kioxia plunged more than 11 percent. Advantest shares plummeted 7.0 percent, while shares of technology investor SoftBank are down 6.8 percent. On the Chinese stock exchanges in Shanghai and Hong Kong, the leading indices are holding up well.

Bonds
The yield on the policy-sensitive two-year U.S. Treasury rose 0.031 percentage point to 4.612%. The yield on the 10-year Treasury note added 0.058 percentage point to 4.951%, its largest gain since Sept. 28. The yield on the 30-year bond climbed 0.055 percentage point to 5.323%.

Analysis
Stifel raises Medartis price target to CHF 129 (104) - Buy
Citi lifts Straumann price target to CHF 94 (88) - Sell
Richemont price target: Oddo BHF cuts to CHF 197 (216) - Outperform

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