The Dow Jones Industrial Average climbed more than 1,000 points on Wednesday after Democrats won the House and Senate and President Donald Trump accepted the results. Gains favored economy-linked and health care shares, while AI-related stocks fell.
The Dow Jones Industrial Average traded 1,024 points, or 2%, higher on Wednesday, as a decisive Democratic victory in the U.S. midterm elections removed political uncertainty hanging over Wall Street. The S&P 500 gained 1.5%, and the Nasdaq Composite jumped 2%.
Trump told The New York Times he was willing to accept the results, and told The Wall Street Journal that he and Republicans would work with Democrats.
Economy-linked and health care shares lead
Shares tied to the economy that could benefit from a more stable environment led the gains. Walmart added 3%, while Bank of America rose 2.5% as investors looked for stocks outside of technology.
Health insurers and hospital operators also advanced. Molina Healthcare rose 5%, and HCA Healthcare gained 7%, while the Invesco Solar ETF jumped 8%.
AI-linked stocks slide
Not every sector gained. Before the election, investors worried that a big Democratic win could mean more restrictions on data centers nationwide, and the Texas governor win by Gina Hinojosa, who has pledged an immediate moratorium there, added to those fears.
Shares of CoreWeave dropped more than 7%, while Nebius fell more than 4%. Semiconductors fell 1%, based on the iShares Semiconductor ETF.
Strategists point to gridlock
Jay Woods, chief market strategist at Freedom Capital Markets, said the rebound was in part due to the president's initial tone. He added that "there will be gridlock and historically this is good for the market".
Andrew Slimmon of Morgan Stanley Investment Management said that if the result increases the push for a resolution to the Middle East conflict, that may bring oil prices lower. West Texas Intermediate crude futures were 2% lower, trading around $94 per barrel, and Slimmon linked oil to inflation and higher rates.
Source: CNBC
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