U.S. stocks rallied Wednesday after President Donald Trump's party lost its sole control of Washington in the midterm elections. The S&P 500 jumped 1.8%, the Dow Jones Industrial Average rose 1,501 points, or 2.9%, and the Nasdaq composite gained 2.1% as of early afternoon Eastern time. Solar-power companies, dollar stores and hospital owners led the gains as Wall Street assessed the fallout from widespread Republican losses.
Brent crude oil fell below $100 a barrel for the first time in nearly a month. Vice President JD Vance blamed the war with Iran, which caused a spike in oil prices, for the Republican midterm losses. Strategists had urged investors not to overreact to the election, noting that corporate profits and interest rates matter more for stocks over the long term. "Earnings trump elections," said Brian Jacobsen, chief economic strategist at Annex Wealth Management.
Wall Street may have received a preferred scenario with Democrats set to control both the Senate and House, as split government lessens the risk of transformative economic changes. However, Trump retains executive authority over defense, foreign policy and some trade matters. Carsten Brzeski, global chief of macro at ING Bank, said a downbeat forecast is that Trump becomes "an angry duck" who restarts tensions over tariffs and NATO spending, while an optimistic view sees a "tame duck" focused on ending wars without disruption.
Trump Media & Technology Group fell 15.9%, continuing a slide from a peak of $175 five years ago toward $5. Elon Musk's businesses also struggled, with Tesla down 2% and SpaceX down 3.4%; Musk, a former top Trump adviser, faces possible investigations by a Democratic-controlled Congress. AI-related stocks also came under pressure on concerns that Democratic victories, particularly in Texas, could slow data center build-outs and increase regulation. Nvidia, the chip company, was among those affected.
Sources: Las Vegas Review-Journal
Original reporting: Las Vegas Review-Journal →
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