Wall Street's first read of the midterms was broadly positive, but the gains were uneven. U.S. stock futures surged Wednesday after the election produced Democratic majorities, AP reported, and the dollar fell to a one-month low while Treasury yields dipped and gold rose, according to CNBC. Trump's statement that he would accept the results helped futures recover from overnight lows.

Defense stocks moved the other way. Northrop Grumman (NYSE: NOC), RTX (NYSE: RTX), Lockheed Martin (NYSE: LMT) and General Dynamics (NYSE: GD) fell between 2% and about 3.7% in premarket trading, Benzinga reported. The concern is the budget. Raising annual defense spending from $1 trillion to $1.5 trillion needs congressional approval, and Bloomberg Intelligence analysts warned that Democratic gains could stall spending growth in 2027 and 2028. A Center for Strategic and International Studies analysis cited by Benzinga estimates that Congress is more likely to approve about $60 billion in added defense funding than the $350 billion the White House requested. Capital Alpha Partners' Byron Callan noted that both parties back replenishing missile stockpiles, but costly programs such as the F-35 and Sentinel could face more scrutiny.

The selling crossed the Atlantic. The STOXX aerospace and defense index fell about 0.7% as BAE Systems dropped roughly 4% and Thales, Saab and Rheinmetall lost 2% to 3.5%, Investing.com reported. European clean energy shares, among the hardest hit by Trump's policies, led gains.

The other notable decline was what CNBC called the "Elon Musk trade." SpaceX (NASDAQ: SPCX) and Tesla (NASDAQ: TSLA) were down sharply premarket after Democrats won Texas's Senate and governor races, results one strategist told CNBC were the biggest blow to tech stocks given the state's role as a business-friendly base. CNBC also noted Musk had spent heavily trying to keep Republicans in power. Amazon, Alphabet and Nvidia had recovered from earlier losses, despite concerns that state-level data center restrictions could slow buildouts.

Live ticker

Tickers: NYSE:LMT, NYSE:RTX, NYSE:NOC, NYSE:GD, NASDAQ:TSLA, NASDAQ:SPCX

Why it matters

The election moved money along policy lines within hours: away from companies that depend on rising federal defense budgets or a friendly Texas, and toward sectors expected to face less pressure from Washington. With stopgap government funding running only through Dec. 11, the first budget fight will test those assumptions quickly. This is reporting only, not investment advice.

Sources

• Associated Press, "US futures sharply higher after Democratic route in midterm elections" (Nov. 4, 2026)
• CNBC, "A blue wave sends futures into the green" (Nov. 4, 2026)
• Benzinga, "Lockheed Martin, RTX, Northrop Stocks Fall After Democratic Midterm Sweep Raises Questions Over Trump's Defense Spending Plan" (Nov. 4, 2026)
• Investing.com, "European defense stocks slip as Democratic midterm win raises spending worries" (Nov. 4, 2026)

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