Although votes are still being counted as of Wednesday, tallies thus far have taken the air out of Democrats’ hopes for a sweep and assuaged Silicon Valley’s fears of heightened antitrust scrutiny. Stock prices across the giants jumped from 3 percent up to 8.5 percent on Wednesday, adding several billions of dollars to their soaring market capitalizations, while the Nasdaq Composite ratcheted up as much as 4.45 percent.
According to analyst Benjamin Black, of Evercore ISI, there’s “a material reduction in the possibility of a meaningful overhaul to existing antitrust law,” he said in a note on Wednesday. The firm considered that the biggest risk is the Senate tilting to the Democrats.
The results, which are still unfolding, follow the Justice Department’s suit against Google last month over allegedly anticompetitive practices in its search business. Meanwhile, inquiries into Amazon, Apple and Facebook are ongoing, with the Federal Trade Commission possibly filing suit against the social media platform in the next month or two.
The primary focus of the broadcast news cycle has been on the presidential election, which will hinge on battleground states that are still counting votes. As for a shift in the Senate’s balance of power, the window appears to be closing for the Democrats, which, as of midday on Wednesday, still must secure five seats to take the majority if Donald Trump wins; four, if Joe Biden prevails. And instead of widening their lead in the House, Democrats saw their seats shrink, though it still maintains control.
Experts believe that the legislative threat to tech giants may lack teeth, at least until both houses of Congress and the presidency sit within one party’s control. According to a note from LPL Financial’s Ryan Detrick on Wednesday, “Investors appear to be pricing in increasing odds of a divided government, which may take major tax increases and some regulatory risk off the table.”
On the flip side, if Republicans manage to hold onto the Senate, Tom Essaye, formerly of Merrill Lynch, said in a research note that the chances of a large stimulus package passing dwindle as well. A relief measure may still come — but it likely wouldn’t be at the massive scale hoped for by the Democrats. Or the struggling consumers and small businesses across the country.