US Futures Sink As Democrats Put Up Tough Challenge In Georgia Senate Race

The U.S. stock futures sank Tuesday night as the runoff senatorial elections in Georgia remained tight.

What Happened: S&P 500 futures traded 0.48% lower at $3,701 at press time. Nasdaq futures fell 1.21% at 12,638.25 and Dow futures traded marginally in the red — 0.03% lower at 30,276. The VIX futures were up 1.28%.

The 10-year Treasury yield reached 1%, breaching the key psychological level for the time since March. The 30-year Treasury was at 1.76% at press time.

Incumbent senators, Kelly Loeffler and David Perdue, both Republicans, are fending off Democratic challengers Jon Ossoff and Rev. Raphael Warnock in the race.

The Democrats are winning a larger share of vote post the victory of President-elect Joe Biden in November, according to the New York Times.

Why It Matters: Should both the Democrats win, the Senate would be split 50-50 between the two parties. Vice President-elect Kamala Harris’ tie-breaker vote would give control of the chamber to the Democrats, the Times reported separately. 

Former hedge fund manager and CNBC host Jim Cramer said Monday that the Democrat victory could tremendously impact Wall Street.

Some on the Street feel that a Democrat-controlled Senate could lead to an escalation in corporate taxes and tougher regulation on companies, according to CNBC. As per Oppenheimer strategists, the S&P 500 could drift downwards, as much as 10%, if Democrats manage to win both seats.