Democrats notched early Senate wins, fuelling bets they could wrest control of the chamber from President Donald Trump's Republicans and raising the prospect of a blue sweep in the US midterm election, though the final outcome remained uncertain.

The market reaction was swift with US stock futures declining sharply, while Treasury yields dipped, dragging the dollar lower.

Here are some comments from analysts:

"I don't think the big risk to markets is from the blue wave; it's investors overreacting to a blue wave."

"It’s a little early, but at the end of the day I think a lot of this was factored into markets. I expect a little bit of volatility overnight and into tomorrow, but I don’t think it’s that crazy, not anything out of the ordinary; 2016 was worse. I feel like the real excitement would have been if the Republicans had unexpectedly seen big gains." "Trump still has veto power - that will be one of the sticking points for the remaining two years of President Donald Trump's term. You do have a debt ceiling some time next year.

"In areas such as reversing healthcare spending cuts in the One Big Beautiful Bill, or reversing restrictions on renewable energy, the general consensus is that a divided government is going to create a couple of things - the upside surprise is fiscal deficits are likely to be much more controlled or limited. There's still a number of areas where U.S. President Donald Trump can influence the markets - trade and tariffs, foreign policy, and existing regulations.

"How much is really the election, how much is the AI story that's fermented since three or four weeks ago? I think it's the latter rather than the political story."

"Markets appear to be pricing in the possibility of a stronger-than-expected Democratic showing, which could reduce expectations for further fiscal stimulus. That helps explain the softer dollar and pressure on equities. The sharper decline in Nasdaq futures also reflects concerns that a shift in political control could bring greater regulatory scrutiny of AI and Big Tech, at a time when investors are already questioning elevated valuations and rising AI spending. However, lower Treasury yields could eventually provide some relief, so the initial selloff may not necessarily be sustained." "This is basically an imperial presidency that operates by executive orders. So the fact that it looks like Congress is turning Democrat, I personally doubt that’s going to have much of an impact on actual policymaking. There’ll be more noise, whether it’s impeachment or investigations into corruption and all these wonderful things the Democrats talk about. But is President Trump’s style of rule going to change? I think the answer is no.

"The AI momentum has turned negative, with or without the Republicans having a majority. The starting point for financial markets into this election, particularly for the equity market, has been adverse on AI, and I don’t think the outcome of the election has very much to do with that, or with whether all the tech bros remain in charge and therefore it’s off to the races again. The criticism and the worries about AI go way beyond politics.

"At the margin, I think it’s going to be dollar positive, in the sense that the market’s perception of greater Federal Reserve independence is going to come to the fore."