Stocks Rally as Democrats Take Congress

U.S. stocks rose on the 4th local time after Democrats secured control of both chambers of Congress in the midterm elections, a result known as a “blue wave.” The Dow Jones Industrial Average gained 1,569.40 points, or 3.03%, to close at 53,356.12. The S&P 500 rose 119.70 points, or 1.58%, to 7,688.62, and the Nasdaq Composite added 364.50 points, or 1.44%, to 25,736.51. Investors expected Democratic control of Congress to constrain the Trump administration’s policy agenda and reduce the likelihood of abrupt policy changes. Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, told Reuters that the clear election result reduced uncertainty and that political gridlock often supports stock prices.

Hopes that the Iran war could end early also affected oil and stock prices. December West Texas Intermediate crude fell 8.29% to $88.12 a barrel, while January Brent crude dropped 8.67% to $94.62. Semiconductor and data center stocks fell amid concerns that rules on data center construction and power use could tighten. Democrats made gains in areas with many data centers, including Texas and Georgia, prompting forecasts that expansion could slow and weaken demand for AI chips and server equipment.

Data center operators Hut 8, IREN and Core Scientific fell 23.2%, 11.2% and 10.4%, respectively; Applied Digital dropped 6.7%. Nvidia lost 3.1%, and the Philadelphia Semiconductor Index fell 3.1% to its lowest level in six months. Scott Chronert, head of U.S. equity strategy at Citi Research, said construction delays could change the growth paths of many related suppliers.

Major technology stocks rose on expectations that slower data center construction could ease the burden of AI infrastructure investment and strengthen the position of large companies that already have facilities. Microsoft gained 6.7%, Amazon 6.1%, Alphabet 3.2% and Meta 1.4%. Trump Media & Technology Group, closely associated with President Trump, plunged 24.5%; Tesla and SpaceX fell 3.3% and 3.8%, respectively. Lockheed Martin dropped 6.9% and Northrop Grumman fell 4.5% on the possibility that Congress could curb increases in defense spending. Solar and clean energy stocks climbed on expectations of continued Democratic policy support.

U.S. stocks rose on the 4th local time after Democrats secured control of both chambers of Congress in the midterm elections, a result known as a “blue wave.” The Dow Jones Industrial Average gained 1,569.40 points, or 3.03%, to close at 53,356.12. The S&P 500 rose 119.70 points, or 1.58%, to 7,688.62, and the Nasdaq Composite added 364.50 points, or 1.44%, to 25,736.51. Investors expected Democratic control of Congress to constrain the Trump administration’s policy agenda and reduce the likelihood of abrupt policy changes. Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, told Reuters that the clear election result reduced uncertainty and that political gridlock often supports stock prices.

Hopes that the Iran war could end early also affected oil and stock prices. December West Texas Intermediate crude fell 8.29% to $88.12 a barrel, while January Brent crude dropped 8.67% to $94.62. Semiconductor and data center stocks fell amid concerns that rules on data center construction and power use could tighten. Democrats made gains in areas with many data centers, including Texas and Georgia, prompting forecasts that expansion could slow and weaken demand for AI chips and server equipment.

Data center operators Hut 8, IREN and Core Scientific fell 23.2%, 11.2% and 10.4%, respectively; Applied Digital dropped 6.7%. Nvidia lost 3.1%, and the Philadelphia Semiconductor Index fell 3.1% to its lowest level in six months. Scott Chronert, head of U.S. equity strategy at Citi Research, said construction delays could change the growth paths of many related suppliers.

Major technology stocks rose on expectations that slower data center construction could ease the burden of AI infrastructure investment and strengthen the position of large companies that already have facilities. Microsoft gained 6.7%, Amazon 6.1%, Alphabet 3.2% and Meta 1.4%. Trump Media & Technology Group, closely associated with President Trump, plunged 24.5%; Tesla and SpaceX fell 3.3% and 3.8%, respectively. Lockheed Martin dropped 6.9% and Northrop Grumman fell 4.5% on the possibility that Congress could curb increases in defense spending. Solar and clean energy stocks climbed on expectations of continued Democratic policy support.