Global stocks recovered on Wednesday from lows hit overnight, while the dollar and oil dipped, after Democrats won control of both the Senate and the House in the US midterm elections.

Europe’s STOXX 600 jumped 1.4 percent to two-month highs, MSCI’s All-World index was up 0.3 percent, and US stock futures reversed course to rally around 1 percent, having fallen by as much as 2 percent overnight. AI stocks in Asia initially led the decline in equity markets, and investors expect the Democratic-controlled Congress to apply more scrutiny to the sector. Shares in Elon Musk’s Tesla and SpaceX, which he intends to merge, were down around 4.5 percent to 5 percent in premarket trading, compared with rises of 0.8 percent to nearly 3 percent for other Big Tech stocks. AI and defense stocks slid as clean energy shares rallied after Democrats took control of Congress.