Democrat Doug Jones' stunning upset victory in Alabama's Senate race against Republican Roy Moore has knocked the GOP's Senate majority down to 51-49, a move that could potentially derail the party's pursuit of a landmark tax reform bill.
"If tax reform gets delayed, this will become a market-moving implication," Richard Kelly, head of global strategy at TD Securities, told CNBC on Wednesday. "Otherwise, especially for the next two days, I think everyone's looking at the Fed, ECB (European Central Bank)," he added, referencing upcoming central bank decisions on future interest rate rises.
U.S. stock futures, Treasury yields and the dollar fell Wednesday morning, indicating market doubts over whether legislators can indeed pass the bill.
The first Democrat to win a Senate seat in Alabama in 25 years, Jones was announced the winner of the deep-red state's legislative contest after a very tight race, edging over the embattled Moore by just over 1.5 percent late Tuesday night. This could throw the future of the Republican tax reform agenda into a precarious state as the GOP now holds a fragile 51-49 Senate majority.
Moore, meanwhile, has so far refused to concede, telling his supporters,"When the vote is this close... it's not over."