Americans vote on Tuesday 3 November for every seat in the House and 35 in the Senate, and London's FTSE 100 will feel the results through the dollar, Treasury yields and Wall Street's mood.

The vote that London cannot ignore

The FTSE 100 goes into Tuesday's US midterm elections in reasonable shape. London's leading index closed on Monday 2 November at 10,761.33, up 31.55 points or 0.3%, extending its winning run to four sessions. It is about 2.1% shy of its 2026 high of 10,989.45.

Wall Street was in a cheerful mood too. At the London close, the Dow was up 1%, the S&P 500 had gained 0.6% and the Nasdaq was 0.7% higher. That followed a difficult October in which the S&P 500 fell almost 1% amid a sell-off in AI-related stocks, while the FTSE 100 posted its first monthly gain in three months.

Now the attention shifts to Washington. All 435 seats in the House of Representatives and 35 Senate seats are being contested. The result will shape the balance of power in Congress, and markets on both sides of the Atlantic will be digesting it from Wednesday morning, UK time.

Nobody can say in advance which way the vote will go, and this article makes no forecast. What can be mapped is how a US political shock, in either direction, typically reaches a London-listed index.

Three routes from Washington to London

The dollar. Sterling closed Monday at $1.3417, up from $1.3396 on Friday. Many FTSE 100 companies earn, report or pay dividends in dollars, so any sharp move in the US currency after the vote would alter the sterling value of those earnings. A weaker dollar tends to trim the pound value of overseas profits; a better one tends to lift it.

Treasury yields. The US 10-year Treasury Yield stood at 4.89% and the 30-year at 5.25%. Election outcomes can shift expectations about US government spending and borrowing, which feed through to yields. Global Bond markets are linked, and UK gilts have had a turbulent autumn: 10-year yields hit 5.44% earlier in October, a 19-year high, before late-October reports put them below 5.3%. A jump in US yields could add pressure on gilts at a sensitive moment.

Risk appetite. If Wall Street sells off sharply on an unexpected result, London rarely escapes entirely. Equally, a result markets take well could extend the risk-on tone that lifted both sides of the Atlantic on Monday. In Europe, the Stoxx 600 rose 0.42% to 649.44 on Monday, a two-month high, while the CAC 40 gained 0.98% and the DAX added 0.6%.

Sectors most exposed to a US surprise

The FTSE 100's mix makes some areas more sensitive than others to American politics and the dollar.

Energy is one. Oil prices have been driven in recent days by the US–Iran situation. Brent Crude dropped to $105.09 a barrel at the London close, from $117.61 on Friday, on reports that Washington and Tehran were considering renewed negotiations. That knocked BP (LSE:BP.) down 4.37%, Shell (LSE:SHEL) down 2.86% and Ithaca Energy (LSE:ITH) down 5.94%. With US foreign policy now so central to the oil price, the political backdrop in Washington is relevant to these stocks.

Companies with substantial US operations are another. National Grid (LSE:NG.), which reports half-year results on Thursday, plans to invest at least £70bn over five years across the UK and the US Northeast. Smith & Nephew (LSE:SN.), which updates the market on Wednesday, flagged weakness in US implants in August, when it cut its full-year adjusted Revenue growth guidance to about 4% from 6%. And Associated British Foods (LSE:ABF), which publishes full-year results on Tuesday itself, had 47 Primark stores in the US as of its September update, where sales rose about 11% in the fourth quarter.

Precious metals form a third channel. Gold rose to $3,968.02 an ounce on Monday from $3,898.22, and Fresnillo (LSE:FRES) climbed 4.56%. Political uncertainty can influence Demand for bullion, although Monday's move came before any votes were cast.

The midterms do not have the week to themselves. Wednesday brings eurozone Inflation figures, expected to rise to 3.9%, along with updates from Marks & Spencer (LSE:MKS), Prudential (LSE:PRU) and others. Thursday is dominated by the Bank of England's rate decision, with markets pricing about a 95% chance of a quarter-point rise to 4% from 3.75%. On Friday, the US October payrolls report lands; September saw just 29,000 jobs added and Unemployment at 4.2%.

That cluster of events means the FTSE 100's reaction to the US vote may be hard to isolate. A move on Wednesday morning could be partly about Washington and partly about positioning ahead of the Bank of England. The cleanest read may come from the dollar and Treasury markets rather than the index itself.

Illustration: if the pound moved from $1.3417 to a hypothetical $1.3600 after the vote, a $100m stream of overseas profit would convert to about £73.5m instead of roughly £74.5m, a reduction of about £1m. If sterling instead fell to a hypothetical $1.3200, the same $100m would be worth about £75.8m. These rates are invented purely to show the mechanics.

Key dates to watch

  • Tuesday 3 November: US midterm elections; ABF full-year results
  • Wednesday 4 November: Eurozone inflation figures, expected to rise to 3.9%
  • Wednesday 4 November: Smith & Nephew Q3 trading statement
  • Thursday 5 November: Bank of England rate decision; National Grid half-year results
  • Friday 6 November: US October payrolls

The bottom line

Tuesday's midterms are a US event with London consequences. The FTSE 100 will feel the outcome mainly through the dollar, Treasury yields and the tone on Wall Street, with energy stocks, US-exposed businesses and precious metals miners among the most sensitive. With the Bank of England and US payrolls following close behind, any reaction could be quickly overtaken. Investors will be watching Wednesday's open for the first clues to how markets have priced the new balance of power in Washington.