(Reuters) – Nasdaq 100 futures slumped more than 1% on Wednesday as investors pricing in the likelihood of Democrats winning both races in the Georgia Senate run-off that will determine the balance of power in Washington.

Edison Research has summoned a race for Democrat Raphael Warnock, displacing Kelly Loiffler, while Democratic challenger John Usoff narrowly led Republican David Purdue in the other race with 98% of the vote counted.

The Democratic-controlled Senate would give President-elect Joe Biden more room to work on his reform plans including stimulating new COVID-19, but it could also mean higher corporate taxes and tighter regulations on technology caps – policies that are not usually favored by Wall Street.

“The blue wave” may not be a bad outcome for the markets, as critical fiscal measures will help accelerate the economic recovery, said Vasu Menon, Executive Director of Investment Strategy, OCBC Bank, Singapore.

„This will be broadly bullish for risky assets, particularly stocks, credit, commodities, and equities in emerging markets.“

By 2:06 AM ET, the Dow e-minis was up 89 points, or 0.29%. Overall, the components of the Dow Jones Excellent Index are expected to benefit from a rebound in economic activity.

The S&P 500 e-minis slipped 5.25 points, or 0.14%, and the Nasdaq 100 e-minis slipped 147 points, or 1.15%.

Hopes for a vaccine-backed economic recovery in 2021 pushed major Wall Street indices to record highs in late December, but sentiment has been dampened recently due to the discovery of a more contagious variant of the coronavirus and recent restrictions.

Analysts are also expecting the market to consolidate December’s gains in January as asset managers look to rebalance their portfolios, which were heavily skewed towards equities.