U.S. markets rally following Democratic midterm election victories

U.S. stocks rose on Wednesday following a midterm election in which Democrats won control of both the House and the Senate. The Dow Jones Industrial Average rose 3%, increasing by over 1,500 points, marking its best single-day performance since President Trump paused a sweeping tariff rollout in April 2025.

Market Performance and Sector Shifts

The S&P 500 climbed 1.6% while the Nasdaq Composite rose 1.4%. Investors rotated into several large technology names, with Apple and Microsoft both hitting all-time highs. Apple's market capitalization rose above $5 trillion as shares jumped 6%.

Several sectors experienced significant movement:

• Technology and AI: While some tech stocks rose, others faced pressure. Nvidia fell 2% and Micron fell 6.85%. Investors expressed concerns regarding potential Democratic regulations or restrictions on the AI industry and the buildout of AI data centers.
• Energy: Oil prices plunged as the election outcome raised hopes for an end to the war in the Middle East. Brent crude oil futures dropped 8% to around $95 per barrel, while West Texas Intermediate crude fell more than 7.7% to below $90 a barrel.
• Healthcare and Retail: Stocks for hospital owners and retailers serving low-income Americans led part of the rally. HCA Healthcare rose 10.9%, and Dollar Tree rose 8.7%.
• Trump Media: Trump Media & Technology Group (DJT) stock fell 23.5% during trading.

Economic and Corporate Updates

On the economic front, ISM and S&P data indicated that U.S. services activity expanded at a slower pace in October. The ISM services index fell to 54.5 from 54.9 in September. However, private-sector hiring showed strength, with an ADP report indicating that private companies added 86,000 jobs in October.

Corporate earnings also influenced market movement:

• Duolingo (DUOL): Shares soared over 30% after reporting that daily active users rose 29% year over year to 64.9 million.
• McDonald's (MCD): Reported that same-store sales grew by 1.5% year over year.
• Uber (UBER): Shares rose 7% despite a forecast for fourth-quarter adjusted EPS of $0.95 to $0.99, which was below estimates of $1.06.

Why it matters

Wall Street generally prefers split control of Washington because it "lessens the risk of transformative changes to the economy," according to reports from the Associated Press. The shift in Congressional control may influence future policy actions regarding housing, pharmaceuticals, and data center construction.

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Sources

• finance.yahoo.com: Stock market today: Dow surges 1,500 points, S&P 500 and Nasdaq rally following historic midterm election
• apnews.com: US stocks rally but Tesla’s falls after Democrats win big in midterms | AP News
• bnnbloomberg.ca: Markets today: U.S. stocks surge, Dow soars 1,500 points

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.