Global stock indices recovered after an early drop following the Democrats' victory in both chambers of the U.S. Congress. Wall Street and Asian benchmarks gained between 2.16% and 5.09%. Investors are weighing how much a divided government can change policy.
Global equities recovered sharply after falling earlier in the day, when Democrats won both chambers of the U.S. Congress.
On Wall Street, the S&P 500 rebounded 2.18% and the Nasdaq gained 3.13%. The Dow Jones rose 2.16%, while the Russell 2000 climbed 2.31%.
Asian markets bounced back too. Japan's Nikkei 225 recovered 5.09%, and South Korea's KOSPI gained 4.71% from their session lows.
Investors weigh the limits of a divided Congress
The recovery comes as investors assess what the Democratic victory means for Trump's remaining two years in office. After January 3, 2027, Democrats can block legislation and investigate the administration.
However, Trump keeps his veto power, and Democrats lack the two-thirds majority needed to override it. That limits their ability to change Trump's economic policies or restrict military action against Iran.
Investors may be reacting to the possibility of political deadlock rather than major policy changes. A divided government could make it harder for either side to pass new legislation.
Source: Coinpedia
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