stocks were trading near session lows wednesday afternoon a day before the october consumer inflation report and as tight races in midterm elections left control of the us house and senate up for grabs on tuesday the dow jones industrial average 1 the sp 500 increased 06 and the nasdaq composite gained 05 the sp 500 remains down 20 for the year to date stock indexes fell further wednesday afternoon ahead of the consumer price index data for october due thursday and as the results from the us midterm elections trickled in but the battle to control congress remained unclear stocks saw a run up on the rumor of a republican wave but investors are selling the news on election results said robert pavlik senior portfolio manager at dakota wealth management the sp 500 index rallied over the past three sessions partly on hopes that gains for the republicans might deliver partisan gridlock in washington a popular view on wall street has been that a divided government could be beneficial for equity valuations since it may reduce regulatory uncertainty crimp the likelihood of more corporate taxes and mean less government spending which should help undercut inflation in turn less inflation could at the margin reduce the need for the federal reserve to continue to raise interest rates aggressively the sp 500 is down nearly 20 in 2022 as the fed has raised its benchmark interest rate from effectively zero at the start of march to a range of 375 to 4 however richmond fed president thomas barkin on wednesday said the fed shouldnt stop raising interest rates for fear of sparking an economic downturn because it risks inflation coming back even stronger requiring even stricter measures down the road still the focus on wall street was on midterm election results on thursdays inflation update with the consumerprice index for october expected to show persistently high prices compared with a year ago despite dramatically higher rates see us inflation likely to post another sharp increase in october cpi to show while markets were still digesting the outcome of the midterm elections the bigger data point likely will be thursdays cpi reading said jake jolly senior investment strategist at bny mellon investment management he pointed to relative calm in the treasury bondmarket yield curve over the past 24 hours it suggests this is a market thats processing and pricing in the midterm results but really waiting to see what inflation data looks like tomorrow he said in a phone interview the 2year us treasury yield  which is particularly sensitive to monetary policy was trading around 465 on wednesday having flirted with 15year high near 475 at the beginning of the week the dollar index gained 08 to 11047 against a basket of rival currencies investors also have been monitoring a fresh crypto wobble bitcoin was trading at a twoyear near 16000 as investors digested news that binance might be backing off a deal to acquire rival ftx which has been hit by a liquidity crunch what happens is that bitcoin holders invested in the stock market have to raise cash to meet margin calls pavlik said adding that the stock market gets further squeezed to the downside when coupled with selling tied to the midterm elections in corporate earnings walt disney co dis and news corp nwsa fell after posting disappointing results while declines in big tech names including apple inc aapl amazoncom inc amzn and nvidia corp nvda weighed on the nasdaq100 october cpi will be very important and consensus is looking for another hot print with some seeing yearonyear surging to 9 this shows that many armchair economists simply draw lines on both growth and acceleration said tom lee head of research at fundstrat who added that he reckons the inflation number will come in softer than expected all in all this keeps us constructive on stocks into year end and we think this rally will rise further and last longer than the 23 trading day rally following june pivot talk lee said