Dow Jumps 3% After Midterm Shift

The Dow Jones Industrial Average rose 1,569.40 points on Wednesday, closing at 53,356.12. This 3% gain marked the index’s largest daily move since the start of the year. The S&P 500 climbed 1.6% to 7,688.62, its best day in three months, while the Nasdaq Composite added 364.50 points to reach 25,736.51.

The rally followed the midterm elections, in which President Donald Trump’s Republican Party lost exclusive control of Washington. Democrats are poised to take the Senate and the House of Representatives. Market strategists had long argued that stock prices depend more on corporate earnings and interest rates than on which party controls Congress. Brian Jacobsen, chief economic strategist at Annex Wealth Management, noted that earnings usually trump election results.

Stocks tied to Trump and Elon Musk faced pressure. Trump Media & Technology Group dropped 24.5%, trading at $4.49 after peaking at $175 five years ago. Tesla fell 3.3%, and SpaceX declined 3.8%. Investors view a Democratic-led Congress as a potential obstacle for Musk’s businesses, which could face new investigations. AI stocks also slipped, with Nvidia down 3.2% and CoreWeave falling 9.9%, despite Alphabet rising 3.2%.

Defense contractors and oil majors saw declines. Lockheed Martin lost 6.9%, Northrop Grumman dropped 4.5%, and General Dynamics fell 2.6%. Brent crude plunged 8.7% to $94.62 a barrel, hitting ExxonMobil, which fell 4.6%, and ConocoPhillips, which dropped 5.2%. Vice President JD Vance blamed the Republican losses on the war against Iran, a conflict that had previously driven up oil prices.

Healthcare and discount retailers posted gains. HCA Healthcare, which operates hospitals and outpatient centers, jumped 10.3%. Dollar Tree, a retailer focused on lower-income consumers, rose 9.6%. Investors anticipate that a Democratic Congress may reverse some federal healthcare cuts and expand assistance for struggling households. Solar and wind firms also advanced, with First Solar up 4.6% and Enphase Energy up 3.7%.

Treasury yields fell as oil prices dropped, easing inflation concerns. The 10-year Treasury yield declined from 4.95% to 4.88% late Tuesday. Global markets followed the U.S. lead, with Paris up 2%, Shanghai up 2.2%, and London up 1.8%. Japan’s Nikkei 225 was the exception, falling 1.4%.