Dow Rallies 1,569 Points on Midterm Relief: Stock Market Today
Stocks of just about all sectors and sizes rose in the wake of a "blue wave" that resolved midterm election uncertainty. But AI and oil are still big variables.
Stocks soared Wednesday after Tuesday's midterm elections offered little room for challenge on integrity grounds and left no question about control of Congress for the next two years. Indeed, President Donald Trump has said he will accept the results and work with Democrats over the balance of his term.
"We'll, you know, look forward to working with them," he said in an interview with The New York Times. "We'll probably work something out." At almost the same time, Trump posted an image of a MAGA-red "VETO" hat on Truth Social.
Note that Trump Media & Technology Group (DJT) was down 24.5% to close at $4.49 on Wednesday. The communication services stock has been in a steady slide since hitting an all-time high of $79.38 on March 26, 2024.
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The front-month West Texas Intermediate crude oil futures contract was down 7.7% to $88.67 per barrel, as investors, traders and speculators priced in potential post-midterm changes in U.S. foreign policy.
Treasury yields were lower across the maturity spectrum, including the 2-year (-3.5 basis points, 4.579%), the 10-year (-6.2 bps, 4.888%) and the 30-year (-4.7 bps, 5.277%).
The tech-heavy Nasdaq Composite surged 1.4% to 25,736, the broad-based S&P 500 climbed 1.6% to 7,688, the small-cap Russell 2000 jumped 1.6% to 2,856, and the blue-chip Dow Jones Industrial Average was up 3% to 53,356 for its biggest post-midterm election rally since 1982.
Data centers and energy stocks lose
"Democrats won the Senate and the House, and governors favoring data center pauses won in a number of states, including Texas," observes Keith Parker, head of U.S. and global macro strategy at UBS. As Parker explains, exit polls show most voters oppose new data centers in their communities.
Price action for cloud computing platform CoreWeave (CRWV, -9.9%), data center operator Applied Digital (APLD, -6.7%) and Elon Musk's SpaceX (SPCX, -3.8%) reflected this rising electoral opposition.
"The blue wave will have implications for equities," the strategist writes, "with the biggest impact likely coming from an increase in data center regulation at the state level near-term."
At the same time, nine of 11 sectors, including tech stocks, consumer discretionary stocks and consumer staples, were up on Wednesday. But energy stocks were down 4.8%, and industrials shed 1.1% as a group.
Only Nvidia (NVDA, -3.2%), Chevron (CVX, -3.7%) and Caterpillar (CAT, -5.2%) among the 30 Dow Jones stocks closed in the red.
3M (MMM, +9.6%) was Papa Dow's top performer, though industrial stocks were generally lower on Wednesday. Sherwin-Williams (SHW, +6.6%) made another big move, as materials stocks did their part to paint it green.
Alphabet (GOOGL, +3.2%), Amazon (AMZN, +6.1%), Apple (AAPL, +5.3%) and Microsoft (MSFT, +6.7%) put up solid gains, too, as most of the Magnificent 7 stocks enjoyed fresh bids.
The chips are down
Advanced Micro Devices (AMD, +1.0%) stood out among semiconductor stocks after management beat Wall Street expectations with its third-quarter results and its fourth-quarter guidance on strong demand from data centers for its enterprise CPUs and its AI accelerators.
The chipmaker was up even as Nvidia and the VanEck Semiconductor ETF (SMH, -2.8%) were well down by the closing bell on this post-midterm Wednesday.
We'll hear from the leader of the AI revolution and CEO Jensen Huang when Nvidia reports fiscal 2027 third-quarter results after the closing bell on Tuesday, November 17.
What to do in November
You know what midterm elections mean for your portfolio. But the midterms are over now. And stock market seasonality says it's a particularly good time to be invested.
Looking for more timely stock market news to help gauge the health of your portfolio? Sign up for Closing Bell, our free newsletter that's delivered straight to your inbox at the close of each trading day.
Have some cash to deploy? Kiplinger contributor Kyle Woodley has some ideas about what you can do with it right now. And he avoids much mention of politics, other than to dismiss it.
"Don't worry," Kyle writes. "I'm on your side." Indeed, his look at some of the best investing options for November excludes factors such as Tuesday's midterms and Black Friday on November 27.
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