Economy
Stocks slide as Democrats score big in US midterms, in blow to Trump
U.S. stock futures were slightly down and other markets were mixed as the dollar weakened on Wednesday in response to big wins by Democrats in the midterm elections.
Stock index futures swooned as the results started to emerge but later trimmed losses on Wednesday, with S&P 500 futures down 0.5% and Nasdaq futures off 0.8%.
The U.S. dollar index, which measures the greenback’s strength against a basket of six currencies, was down 0.2% at a one-month low of 101.51.
Asian stocks were, meanwhile, mixed Wednesday as investors tried to ascertain the impact of a Democratic sweep of Congress that dealt a blow to President Donald Trump’s economic agenda as he heads into his final two years as president.
Equities and the dollar sank initially amid warnings that the result – which saw Republicans ousted in a so-called blue wave – could lead to gridlock on Capitol Hill after Trump warned that he would become “Mr Veto.”
Tech firms, already under pressure, were also hit by concerns about the future of data center building – a major bone of contention in many places.
Tens of millions of Americans cast their vote in the crucial polls pitched as a referendum on the White House amid anger at surging petrol prices, tariffs and the Iran war.
‘Potential legislative gridlock’
With Democrats winning key races to flip the House and Senate – including once-safe Republican seats – Chris Weston at Pepperstone flagged “the potential for legislative gridlock, fiscal brinkmanship, debt-ceiling disputes, and congressional investigations.”
However, he added that “the president would retain considerable executive authority, so the implications for individual sectors are far from straightforward.”
Trump threatened in a telephone interview with the CBS network on Tuesday to be “Mr Veto” and block any Democratic legislation if they win.
The prospect of Congress coming to a standstill weighed on the dollar and Treasury yields, with observers pointing out that such a scenario would restrict spending.
“Democratic control of Congress will make it harder for the White House administration to pass major partisan legislation. That could reduce the prospect of significant additional fiscal stimulus over the next two years,” wrote David Chao at Invesco.
“For Asia, the implications matter. Less fiscal stimulus could reduce upward pressure on US growth, inflation and Treasury yields, potentially easing some of the pressure that higher US rates and a stronger dollar have placed on Asian currencies and monetary policy.”
However, as the results came in, he offered a more conciliatory tone to the New York Times, saying he was “absolutely willing to accept those results” and expected to work out deals with Democrats.
That provided the queue for a bounce in some stock markets, as well as the dollar and Treasury yields.
Hong Kong, Shanghai and Seoul reversed losses, while Wellington and Manila were also up.
However, Tokyo, Sydney, Singapore, Taipei, Mumbai, Bangkok and Jakarta all fell.
While they managed to pare losses, tech firms remained under pressure as investors continue to fret over the AI investment boom and when firms that have pumped billions into the sector will eventually see returns, if ever.
AI outlook uncertain
Traders were also nervous about the outlook for the AI buildout, with many Democrats taking advantage of anger over data centre development.
“The concern isn’t that a Democratic governor automatically shuts the gates on data-center construction,” said Stephen Innes at SPI Asset Management.
“It is that a change in political leadership could alter the regulatory environment just as developers are committing enormous amounts of capital to projects dependent on electricity availability and predictable construction schedules.”
Japanese chipmaker Kioxia plunged more than 5%, while Advantest and SoftBank lost more than 3%. Seoul’s SK hynix and Samsung were also down.
Oil prices edged up as investors kept tabs on the Middle East after Trump confirmed U.S. strikes on Iran but played down speculation he was preparing to resume bombing after the election.
“We seem to be getting everything we want,” he told the Financial Times newspaper on Tuesday.
“I’m ready, we’re ready. We’re locked and loaded if we need to go, but there may be no reason for it.”
His Iranian counterpart Masoud Pezeshkian said his government was still trying to resolve the crisis “through dialogue,” adding that “no one will benefit from this war” if it reignited.
However, Iran’s chief negotiator, Mohammad Bagher Ghalibaf, said the Islamic republic was “ready for battle with its finger on the trigger,” while Deputy Foreign Minister Kazem Gharibabadi said Tehran retained the right to “legitimate self-defense.”
He later posted on X that “Americans said NO TO WAR, and we endorse this message.”
President Recep Tayyip Erdoğan met with top South Korean executives from the technology, electronics, biotechnology, and chemical industries on Wednesday during his official visit to Seoul.
LG Electronics CEO Lyu Jae-cheol, Celltrion CEO Seo Jin-seok, SK Chemicals and SK Plasma CEO Jaehyun Ahn, and Hyundai Motor Group CEO Chung Euisun attended the meeting alongside their delegations at the hotel where Erdoğan was staying.
Erdoğan also received Samsung Electronics CEO Roh Tae-moon, Chemtronics Wits Chair Kim Bokyun, and Korea Electric Power Corporation (KEPCO) Vice President Chan-hyuk Chun, along with their respective delegations.
The Turkish participants included Energy and Natural Resources Minister Alparslan Bayraktar, Industry and Technology Minister Mehmet Fatih Kacır, AK Party Deputy Chair Halit Yerebakan, Investment Office President Ahmet Burak Dağlıoğlu, Foreign Policy Senior Adviser Akif Çağatay Kılıç, and Senior Adviser Zafer Çubukçu.
Top German auto parts supplier Schaeffler, whose customers include major European car brands, announced Tuesday that it planned to cut almost 3,500 jobs and close five sites in Europe as the crisis gripping the region’s car industry deepens.
Like other German carmakers and suppliers, the group has struggled with competition for its key products, which include ball bearings and electric vehicle parts, especially from Chinese manufacturers.
Three-quarters of the 3,460 job cuts and four of the five site closures will be in Germany, the company said in a statement, pointing to “above-average” labor costs in Europe’s top economy.
The cuts, to be completed by 2028, are about 3% of the group’s global workforce of almost 110,000, and should result in annual savings of about 300 million euros ($336 million) from 2030, it said.
Schaeffler said in a statement that it was “responding to the persistently challenging environment in the automotive industry.”
The company cited “an overall downturn in the market and intensifying competition … characterized by weakened demand for internal combustion engine vehicles and a delayed ramp-up of electric mobility,” it added.
The cuts would mainly focus on production and research and development.
The sites set for closure are in Berlin, Dortmund and two other towns in western Germany. A small site in Belgium will also be shuttered.
There will also be job cuts at sites in France and Slovakia.
Schaeffler said some of the job losses would be offset by the creation of positions in “future-oriented fields,” such as humanoid robotics and defense.
While not as well known as the car titans they work with, such as Volkswagen, BMW and Mercedes-Benz, the German supplier is a crucial part of the auto ecosystem, providing everything from braking systems to in-car electronics.
But as automakers have fallen into crisis, battling Chinese competition, high production costs at home and weakening demand, suppliers have been hit hard.
Volkswagen is planning to cut about 120,000 jobs across its brands by 2030.
German industrial giant Bosch, the world’s largest supplier of car equipment, announced 13,000 job cuts last year, mostly in its auto division.
Australia’s central bank hiked its key interest rate to an 18-year high on Tuesday, citing the prolonged war in the Middle East and elevated inflation.
In a statement, the Reserve Bank of Australia (RBA) said it would raise its cash rate by 25 basis points to 4.85%.
“Inflation remains elevated,” it said. “This partly reflects higher fuel and other commodity prices affected by the conflict in the Middle East.”
“AI-related investment is driving rapid growth in prices for technology-related goods, and inflation in many goods and services remains high.”
This marks the fifth increase this year, adding to household cost-of-living pressures by increasing home mortgage payments, a politically potent topic in Australia.
It brings rates to a level not seen since late 2008, at the height of the global financial crisis.
“There continue to be heightened uncertainties about the outlook for domestic economic activity and inflation,” the RBA warned.
“Global oil supply disruptions are maintaining upward pressure on global and domestic energy prices and inflation. A period of prolonged uncertainty may also cause growth to be lower overseas and in Australia,” it added.
Türkiye’s exports surged last month to post the highest-ever October figure, while imports were up only moderately, resulting in a narrowing trade deficit, a top official announced on Tuesday.
Outbound shipments from the country rose 8.1% year-over-year to nearly $25.9 billion (TL 1.29 trillion), Trade Minister Ömer Bolat told the news conference, announcing the preliminary foreign trade data for the month.
“The highest October export record was broken last month; our goods exports rose 8.1% year-over-year to reach $25.9 billion,” Bolat said.
“This marks the third-highest monthly export volume in the 103-year history of our republic. A second significant achievement is the record for the January-October period, in which (exports) rose by 5.5% to $236.8 billion,” he added.
Annualized goods exports also climbed by $15.6 billion compared with October 2025 to reach $285.6 billion, surpassing the government’s target of $282 billion, the minister noted.
“As of the end of October, total annualized goods and services exports rose to $413 billion,” Bolat also said, adding that the government exceeded its $410 billion target set at the beginning of the year as of October.
Trade deficit down 11.4%
Imports, meanwhile, increased 3.4% on an annual basis in October to $32.58 billion, according to the Trade Ministry’s monthly foreign trade bulletin released later on Tuesday.
Consequently, the foreign trade deficit narrowed by 11.4% from October 2025 to $6.7 billion, down from $7.56 billion a year earlier.
The export-to-import coverage ratio rose by 3.4 percentage points to 79.4% in October, while the ratio excluding energy stood at 100% and excluding both energy and gold reached 101.7%.
In the first 10 months of 2026, exports grew 5.5% year-on-year to $236.84 billion, while imports rose 5.1% to $314.5 billion, resulting in a trade gap of $77.67 billion.
Germany remained Türkiye’s top export destination in October with $2.07 billion, followed by the U.S. with $1.86 billion and the U.K. with $1.38 billion.
The top 10 export partners accounted for 45.3% of total goods shipments during the month.
On the import side, China ranked first with $4.41 billion in October, followed by Germany with $2.22 billion and the U.S. with $1.77 billion.
By country groups, the EU was the largest export market, receiving $10.4 billion in Turkish goods, followed by Near and Middle Eastern countries at $4.25 billion and other European nations at $3.74 billion.
Asian countries formed the largest source of imports at $9.77 billion, followed by the EU at $9.39 billion.
By broad economic categories, intermediate goods made up 50.4% of total exports at $13.04 billion, followed by consumer goods at $8.4 billion and capital goods at $3.85 billion.
Intermediate goods also led imports with a 71.7% share at $23.36 billion, followed by consumer goods at $4.65 billion and capital goods at $4.39 billion.
Manufacturing industry products constituted 93.3% of total exports in October, valued at $24.15 billion, while agriculture, forestry and fishing accounted for 3.2% and mining represented 2.5%.
The Türkiye Wealth Fund (TWF) is set to become the largest shareholder in Turkish electric carmaker Togg after restructuring the company’s ownership, the fund announced Tuesday.
The fund said the change in the partnership structure aligns with Türkiye’s objectives of high value-added production and establishing a global mobility and technology brand.
Under the restructuring, a share transfer agreement was signed regarding the transfer of shares held by AG Anadolu Group Holding and Vestel Elektronik in Togg to the Türkiye Wealth Fund and Turkcell.
Vestel and Anadolu Group Holding said on Tuesday they had signed agreements to sell their stakes in Togg to TWF and telecommunications giant Turkcell, in which TWF, through a subsidiary, holds a 26.2% stake.
According to disclosures made to the Public Disclosure Platform (KAP) by the companies, AG Anadolu Group Holding has signed an agreement to transfer its 23% stake in Togg, specifically, a portion equivalent to 11% of Togg’s total capital to Turkcell, and a portion equivalent to 12% to the TWF for 184 million euros ($206.02 million).
Meanwhile, Vestel has decided to sell its entire 23% stake in Togg to the TWF for 184 million euros. Once these transactions are completed, the ownership structure of Togg will change.
The statement indicated that, upon completion of the transaction, Turkcell’s total stake in Togg will rise to 34%, while TWF’s share would rise to 35%.
Thus, under the new ownership structure, the Türkiye Wealth Fund will become the shareholder with the largest stake in Togg.
Togg was founded eight years ago after President Recep Tayyip Erdoğan called for the production of a fully locally funded passenger car.
Before restructuring, Vestel Elektronik, Anadolu Group Holding, Turkcell and BMC Otomotiv each held 23% stakes in the company. The Union of Chambers and Commodity Exchanges of Türkiye (TOBB) owns the remaining 8%.
Entering the automotive market with sales of 19,583 vehicles in 2023, Togg achieved 37,426 sales in the first nine months of this year.
Becoming the sector leader with a 31% share of the Turkish electric vehicle market during the same period, it reinforced its position in the country’s electric mobility transition.
The Türkiye Wealth Fund’s addition as a shareholder is considered a major step in the fund’s objective of realizing domestic investments aligned with Türkiye’s strategic priorities.
Türkiye’s annual consumer inflation edged up slightly to 29.77% in October, official data showed on Tuesday.
Consumer prices also rose by 2.58% on a monthly basis in October compared with September, according to the Turkish Statistical Institute (TurkStat).
The annual rate eased from 32.87% recorded in October 2025 but increased slightly from 29.73% in September.
The 12-month moving average inflation rate stood at 31.23% in October, while price gains since December of the previous year reached 27.52%.
Among the main expenditure groups with the highest weight in the basket, food and non-alcoholic beverages climbed 27.73% year-over-year, contributing 6.81 percentage points to the annual change.
Transportation prices surged 36.39% annually, adding 6.1 percentage points to the overall index.
Housing, water, electricity, gas and other fuels jumped 40.24% compared to October 2025, contributing 4.71 percentage points.
On an annual basis, the highest price increase was recorded in education at 48.86%, followed by health at 43.29% and insurance and financial services at 31.41%.
Clothing and footwear posted the lowest annual rise among expenditure categories at 13.38%.
-
Economy3 days agoTürkiye names new markets regulator leadership after fund crisis
-
Economy3 days agoGermany’s powerful IG Metall union launches warning strikes
-
Politics3 days agoUN envoy returns to Cyprus for talks with Turkish, Greek Cypriot leaders
-
Politics2 days ago41 arrested in Türkiye’s counterterror operations targeting FETÖ
-
Sports2 days agoGalatasaray seek 5th straight win as Stuttgart come knocking in UCL
-
Sports3 days agoKipchumba sets record, Ethiopian women sweep Istanbul Marathon
-
Sports2 days agoAntonelli becomes youngest F1 champion with 3rd place in Mexico
-
Politics3 days agoThousands join silent march for Gaza in southern Türkiye