US stocks tumble as market digests election results, crypto upheaval

Global stock markets fell Wednesday, with key New York indexes ending in a sea of red as traders grappled with inconclusive US election results and upheaval in the cryptocurrency market.

Wall Street stocks tumbled, with the Dow losing nearly 650 points, snapping a three-day rally partly built on expectations that Republicans would win at least one chamber of Congress from US President Joe Biden's Democratic party-bringing about a gridlock scenario seen as benign for markets.

For now, Republicans appeared headed for a narrow majority in the US House of Representatives, although gains were slimmer than expected.

"The stock market had a nice, little run leading up to election day based on the gridlock angle," said Patrick O'Hare at Briefing.com.

"It appears that is going to be the case, so participants are taking some money off the table," he added. Investors also took note of the continued slide of Bitcoin which tumbled on fallout from the near-collapse of cryptocurrency platform FTX, reaching a low at $16,034.70.

Binance, the world's biggest cryptocurrency platform, announced it was ending plans to acquire rival FTX.com a day after disclosing it signed a non-binding letter of intent to buy FTX.

"Even if you are not involved in cryptos, the turmoil is definitely something to keep an eye on, as it may be an additional factor impacting risk appetite across the financial markets," said market analyst Fawad Razaqzada at City Index and FOREX.com.

The Dow Jones Industrial Average fell by nearly two percent, while the broad-based S&P 500 lost 2.1 percent lower and the tech-rich Nasdaq Composite Index slumped as well. But the dollar rose strongly against the British pound, which has been under pressure owing to the UK's bleak economic outlook.

Oil prices dipped as well, as official data from China showed the world's second-largest economy languishing under its strict zero-Covid policy, and US stockpiles increased.

President Joe Biden made a final appeal on the eve of Tuesday's midterms for Democrats to protect democracy by defeating Donald Trump's Republicans in an election that polls show could upend power in Washington.

With Republicans well placed to win at least partial control of Congress and Trump hinting at a 2024 White House comeback bid at his own rally late Monday, Democrats braced for the worst.

Even if Republicans win only the House of Representatives, that would scupper Biden's legislative agenda for the last two years of his first term and potentially lead to a weakening of US support for Ukraine's resistance against Russia.

"Our lifetimes are going to be shaped by what happens," Biden told an enthusiastic crowd at a historically Black university in Bowie, near Baltimore, late Monday. "We know in our bones that our democracy is at risk and we know that this is your moment to defend it."

"The power's in your hands," he told Democrats. "So vote, get out the vote." An influx of far-right Trump backers in Congress would also accelerate the shift that has been taking place inside the Republican Party ever since the former real estate tycoon stunned the world by defeating Hillary Clinton for the presidency in 2016.

Despite facing criminal probes over taking top secret documents from the White House and trying to overturn the 2020 election, Trump is now using the midterms to cement his status as the de facto Republican leader and presumptive presidential nominee.

In a typically dark, rambling speech to fans in Dayton, Ohio, Trump said, "if you support the decline and fall of America, then you must, you absolutely must vote for the radical left, crazy people."

"If you want to stop the destruction of our country, then tomorrow you must vote Republican in a giant red wave."

More than 40 million ballots had been cast through early voting, meaning the outcome was already taking shape before polls opened nationwide Tuesday.