Big Tech firms such as Apple Inc (NASDAQ:AAPL), Google parent Alphabet Inc (NASDAQ:GOOG) and Facebook Inc (NASDAQ:FB) look set to benefit from the mixed outcome of this week’s US election, as continued Republican control of the Senate is likely to squash any Democratic attempts to bring the industry to heel.
In pre-market trading in New York on Thursday, shares in Apple were up 2.6% at US$118, while Alphabet rose 2.5% to US$1,792 and Facebook climbed 2.3% to US$294. Another tech giant and FAANG constituent, Amazon Inc (NASDAQ:AMZN) was also in the ascendency, rising 2.6% to US$3,323.
The strong performance among big tech follows a similarly positive showing in yesterday’s session as it began to emerge that the Democrat’s hopes of a ‘Blue Wave’ election victory, which would have seen them take control of the presidency, the Senate and maintain control of the House of Representatives, had been wildly optimistic, with projections now forecasting the Republicans will maintain of the Senate, turning the election into more of a ‘mauve’ outcome.
“The Democrats’ chances of flipping the Senate to Blue appear to have gone, though counting continues. America remains as divided as ever, with a Blue White House needing to work with a Red Senate, some of the more extreme tendencies of the Democrats will be handicapped”, said Markets.com’s Neil Wilson, although he added that the presence of a Republican chamber was likely to cause “less uncertainty over policy”.
Wilson continued, saying such a situation was “likely to support equities, particularly Big Tech” as it makes the chances of sweeping regulation of the sector much less likely, a development that had been previously been feared following a number of political interrogations of the bosses of the tech giants by US politicians, with the firms receiving criticism over both their market dominance and supposed cases of political bias and censorship.
Another sector that seems prepped to benefit from the continued political gridlock in the health and pharmaceutical industry, as a lack of strong Democratic control in Congress means the chances of a public healthcare option or an expansion of the Affordable Care Act are also very small.