5 things to know before the stock market opens Wednesday

Here are the most important news items that investors need to start their trading day:

U.S. stock markets were on a little bit of a roll ahead of Election Day, as investors had bet on partisan gridlock in the next Congress. Yet, by Wednesday morning, the balance of power had yet to be decided. Early results showed Democrats outperforming expectations (more on that below), with several key seats yet to be divided. Many investors are keen on the parties sharing power in Washington, seeing it as a way to contain spending, especially as high inflation grips the economy. And as long as inflation is high, the Federal Reserve has said it is prepared to keep raising interest rates – a pledge that has weighed on stocks. Read live market updates here.

Let’s start with the Senate. Democrat John Fetterman flipped Pennsylvania’s GOP-controlled U.S. Senate seat, defeating Mehmet Oz, the TV doctor who was backed by former President Donald Trump. Sen. Marco Rubio, R-Fla., won his reelection bid handily, while Trump-endorsed J.D. Vance held off Democratic challenger Rep. Tim Ryan in Ohio. There are four big races left undecided, either too close or too early to call: Arizona, Wisconsin, Nevada and Georgia (which could go to a runoff next month). If Democrats win two of those, they hold the Senate. The fight for the House of Representatives is tight, too, although GOP leaders remain confident it’ll flip to their control. Read election updates here.

Read more: Trump’s favorite candidates disappoint on Election Day, raising questions about 2024

Mark Zuckerberg’s would-be metaverse company, Meta, said Wednesday it will lay off more than 11,000 employees, or about 13% of its workforce. The job cuts come after a sobering earnings report from Meta last month, when it posted surging costs and declining ad revenue. Zuckerberg has been plowing billions of dollars into its nascent online metaverse, which has suffered from declining user numbers and widespread mockery over its cartoonish graphics. Stock of the company, which also includes social media apps Facebook and Instagram, is down over 70% this year as of Tuesday’s close. Its market cap, once above $1 trillion, is now about $255 billion.

Not great, Bob. Disney‘s earnings report Tuesday disappointed in just about every way. Profit missed Wall Street’s expectations by a wide margin. Revenue fell short, too, dragged down by soft performance by the company’s media and entertainment segment. Even the silver linings were offset by gray clouds. Disney+ streaming subscriptions topped expectations, but its high costs ate into the bottom line, and the company expects growth to slow in the current quarter. Disney’s parks and cruises segment posted record revenue, according to CEO Bob Chapek, but even that didn’t live up to analysts’ projections.

Read more: Disney wants you to focus on revenue and profit instead of subscribers — just not now

After a series of successful counteroffensives to seize back territory from the Russians, Ukrainian forces find themselves in near-stalemate conditions on the front lines of the war. “The situation is difficult on the entire front. Fierce positional battles continue in some areas, as before. And it is especially difficult in Donetsk region, as before,” Ukraine President Volodomyr Zelenskyy said Tuesday night. “The occupiers are suffering extremely large-scale losses, but their order to move to the administrative border of Donetsk region has not changed. We are not surrendering a single centimeter of our land there.” Read live war updates here.

– CNBC’s Jesse Pound, Yun Li, Jonathan Vanian, Sarah Whitten and Holly Ellyatt contributed to this report, as did the CNBC.com Politics Team.

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