* Meta Platforms gains on decision to cut 11,000 jobs
* Disney sees biggest one-day drop since 2001 after report
* Indexes: S&P 500 -2.08%, Nasdaq -2.48%, Dow -1.95%
Nov 9 (Reuters) - Wall Street ended sharply lower on Wednesday as Republican gains in midterm elections appeared more modest than some expected, with investors also focusing on upcoming inflation data that will provide clues about the severity of future interest rate hikes.
Republicans were still favored to win control of the House of Representatives but key races were too close to call, with a better-than-expected showing by Democrats diminishing the prospect of a so-called red wave of Republican gains.
"What was really more expected in the market was a red wave," said Jay Hatfield, CEO of Infrastructure Capital Management in New York. "I think we were in a unique situation where the more the Republicans won, the better off the market would have been. At least there would have been some stocks strongly rallying, like defense and energy stocks."
Also hurting sentiment, Walt Disney Co tumbled 13% - its biggest one-day drop since 2001 - after the entertainment heavyweight reported more losses from its push into streaming video.
Tesla Inc dropped 7.2% to a two-year low after Chief Executive Elon Musk late on Tuesday disclosed that he sold $3.95 billion worth of shares in the electric-vehicle maker days after he closed the $44 billion deal for Twitter Inc.
Clean energy shares, which typically benefit under a Democratic leadership, rose, with the Invesco Solar ETF up almost 1%.
Wednesday's drop on Wall Street ended a three-day rally in which the S&P 500 had gained almost 3%.
With the election outcome still uncertain, investors were turning their attention to October inflation data due out on Thursday, which could shed more light on whether the Fed might soften its aggressive stance on interest rate hikes.
"CPI is one of the more important inputs in terms of the inflation environment. You'd be hard-pressed to find many investors that want to make a big bet in front of (the report)," said Art Hogan, chief market strategist at B. Riley Financial.
Major indexes added to declines as Treasury yields climbed further after a poor auction of 10-year notes by the U.S. Treasury. Treasury yields reversed and fell later in the day.
Traders are split over whether the Fed will raise rates by 50 basis points or 75 basis points in December, according to CME Group's Fedwatch tool.
The S&P 500 declined 2.08% to end the session at 3,748.57 points.
The Nasdaq declined 2.48% to 10,353.18 points, while the Dow Jones Industrial Average declined 1.95% to 32,513.94 points.
Investors also fretted about the health of major cryptocurrency exchange FTX after a deal to buy it collapsed as bigger rival Binance said it was pulling out.
Meta Platforms Inc jumped about 5% after the Facebook parent said it was cutting 13% of its workforce, or more than 11,000 employees, in one of the biggest tech layoffs this year.
Wendy's Co rallied 3% after the hamburger chain reported quarterly sales and profit that beat analysts' estimates.
Declining stocks outnumbered rising ones within the S&P 500 by a 11.9-to-one ratio.
The S&P 500 posted 10 new highs and 16 new lows; the Nasdaq recorded 69 new highs and 463 new lows.
Volume on U.S. exchanges was relatively light, with 11.6 billion shares traded, compared with an average of 11.8 billion shares over the previous 20 sessions.