President Donald Trump struck a conciliatory note after the Democrats’ stunning victory in the US midterm elections, easing fears of a severe short-term market correction.

Trump, whose second term as a Republican president will now be shackled by the Democrats’ “clean sweep“ to power in both the US Senate and Congress, told Fox News there were “many, many things” that he could work with the party in Congress.

He also said he would accept the results and acknowledged the impact of his decision to launch a war on Iran in February, a move that has caused oil prices to soar and exacerbated cost-of-living pressures for millions of Americans.

His comment saw the futures market pare back predictions of 2% and 1% falls in the Nasdaq technology index and the S&P 500. Both benchmarks are set to open 0.6% lower when markets reopen this afternoon in London. The same is forecast for the FTSE All-Share when trading starts at 8am.

Yields on US government bonds, or Treasuries, fell across all maturities as investors sought shelter from a negative reaction in equity markets, with the dollar index sliding 0.37% overnight against a basket of currencies.

In Asia, Japan’s Nikkei 225 fell 2.1% as the changing balance of power in the US added to recent investor nervousness over valuations of stocks in the artificial intelligence supply chain.

The initial fearful reaction was in response to the prospect of a divided US government introducing policy uncertainty over AI regulation, defence spending, and financial markets.

This followed an historic rout of the Republicans who suffered a string of surprise defeats in the Senate race in former strongholds such as Kansas, Ohio, North Carolina, South Carolina and Texas.