U.S. stock index futures steady after midterms rally

Investing.com-- U.S. stock index futures steadied on Wednesday evening after a Democrat sweep of Congress in the midterm elections sparked sharp gains on Wall Street.

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Focus now turns to more upcoming third-quarter earnings and key labor data for more cues on the economy and interest rates.

S&P 500 Futures were flat at 7,722.25 points by 19:00 ET (00:00 GMT), Nasdaq 100 Futures fell 0.16% to 28,526.75 points, while Dow Jones Futures steadied at 53,527.0 points.

Futures steadied after Wall Street rallied during Wednesday's session, boosted chiefly by the conclusion of the midterm elections clearing a major point of uncertainty for markets.

The S&P 500 surged 1.6%, the NASDAQ Composite jumped 1.4%, while the Dow Jones Industrial Average soared 3% in its best session in 19 months.

The Democrats clinched strong majorities in both chambers of Congress, as voters largely rejected the Republicans and President Donald Trump over their handling of inflation and the war with Iran.

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The Democrats are expected to pursue policy addressing the cost of living, undoing Trump's tariffs, and potentially ending the war in Iran.

But the Democrats are also expected to pursue more stringent regulation of artificial intelligence and data centers– a notion that sparked sharp losses in data center stocks.

Markets were also wary of potential gridlock in the legislative process, given that a Democrat-led Congress will still have to contend with a Republican White House.

Trump had earlier signaled he would veto any Democrat-backed legislation, but told the New York Times on Tuesday he would accept the results of the election.

The third-quarter earnings season is set to continue on Thursday, with precision engineering firm Parker-Hannifin (NYSE:PH), energy producers Southern Company (NYSE:SO) and Duke Energy Corporation (NYSE:DUK), and homestay platform Airbnb Inc (NASDAQ:ABNB) set to report on Thursday.

Key labor market prints are also due on Thursday and Friday. Weekly jobless claims data and Challenger job cuts readings are due on Thursday, followed by nonfarm payrolls data for October on Friday.

The nonfarm reading is expected to provide more cues on the labor market and will likely factor into the Federal Reserve's plans for interest rates. The central bank is expected to hike rates again in December.

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