Wall Street looked set for a higher open on Wednesday, after the Republican Party took control of the Senate and data showing the U.S. economy created 230,000 private-sector jobs in October.
The labor report from ADP and Moody's Analytics came in just above expectations of 220,000, and marked the second biggest monthly gain of the year.
The Republicans, who also added to their House majority in Tuesday's elections, will have at least 52 seats in the upper chamber, with two races as-yet undecided.
"The markets have a sense of cautious optimism," said JJ Kinahan, chief derivatives strategist for TD Ameritrade. Investors may be feeling some confidence, he said, as the new state of affairs in Washington D.C. could lead to resolutions on major political stumbling blocks.
The GOP's new position of power may also help drive a new Asia-Pacific trade pact and make for a more energy friendly environment in Washington, analysts said. It could also be a short-term catalyst for the market, unless the outcome is clouded by runoff elections.
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Still, the GOP's victory may not be able to break the policy stalemate in Washington.
"[F]ull control of Congress will likely mean some bills, unpopular with the Democrats, will be heading to the White House for a signature that obviously won't be forthcoming. That suggests continued policy gridlock in Washington," said Derek Halpenny of the Bank of Tokyo-Mitsubishi in a research note on Wednesday.
But potentially more important than any congressional initiative is what Tuesday's vote said about the nation's mindset, according to Smead Capital Management CEO Bill Smead.
"The negativism in the way people vote—the throw the bums out routine—is a sign that we're still moving out of the very difficult recession-plagued attitude," he said. "Optimism is inexpensive, it's not a crowded trade because people are still living their psychological business and financial lives in [a recession mindset]."
Falling oil prices will continue to weigh on Wall Street on Wednesday, with Brent crude extending losses into a fifth session after hitting a four-year low on Tuesday.
Federal Reserve officials Narayana Kocherlakota and Jeffrey Lacker are both scheduled to speak this afternoon. Kocherlakota will talk in Minnesota on monetary policy, while Lacker will be in Washington discussing financial stability.
Worries about China may weigh on sentiment during the session, after HSBC's China services purchasing managers' index (PMI) for October hit a three-month low. The report follows mixed data on China's manufacturing sector earlier this week.