S&P 500 set to open under 7,500 as traders bet on a Democratic sweep

Futures traders are flashing red. The S&P 500 is on track to open below 7,500 for the first time since July 31st, according to a post from @KobeissiLetter, as markets price in a Democratic sweep of both the House and Senate.

The pain isn't limited to the benchmark index. Nasdaq 100 futures were down more than 2% overnight, a sharp move for a session that hasn't even started yet.

The trigger, per the account, is politics: traders are positioning for Democrats to take both chambers of Congress. Equity markets tend to reprice fast when the odds of a unified government shift, since one-party control can open the door to bigger swings in tax, spending and regulatory policy.

It's the first trip below that 7,500 line since the end of July, which makes it a level worth watching when the cash market opens. A pre-market signal this strong doesn't always hold — but it sets the tone.

Next up: whether the selling deepens at the opening bell or gets bought back, and whether the political odds driving the move keep shifting.