Markets open flat as Democrats near Senate control

Stock markets on Wednesday opened relatively flat to the news that Democrats may win the Senate majority, which would give the party the presidency and majorities in both chambers of Congress after President-elect Joe Biden takes office.

The Dow Jones Industrial Average opened up 7 points, a negligible amount in percentage terms, while the S&P 500 fell 19 points, or 0.5 percent. The tech-heavy Nasdaq fell more significantly, at 155 points, or 1.2 percent.

In Georgia, the Rev. Raphael Warnock (D) is projected as the winner over Sen. Kelly Loeffler (R), while Jon Ossoff (D) is leading Republican incumbent David Perdue.

Taking both seats would leave a 50-50 Senate, with Democrats holding the majority by virtue of Vice President-elect Kamala Harris’s tie-breaking vote. 

Markets tend to thrive in periods of divided government, when it is more difficult for sweeping legislation to be enacted.

Democrats are likely to push through more robust stimulus for the ailing economy, which according to ADP shed jobs in December for the first time since April. They are also likely to increase corporate taxes, taking away from the bottom lines of big companies traded on major stock indexes.