US stocks rallied on Wednesday, November 4, with the Dow Jones Industrial Average surging nearly 1,000 points, after Democrats secured control of both chambers of Congress in the US midterm elections, raising the prospect of a divided government and easing concerns over policy uncertainty.
The Dow Jones Industrial Average rose 1.9%, while the S&P 500 gained 1.2% and the Nasdaq Composite advanced 1.3%. Investors assessed the potential implications of the Democratic victory for President Donald Trump’s economic agenda, including tax cuts, tariffs and policies affecting businesses.
The election results triggered a reassessment of political risks across sectors. Technology stocks, particularly companies linked to the artificial intelligence infrastructure build-out, came under pressure amid concerns that a Democratic-controlled Congress could push for tighter restrictions on data centre construction. Shares of Nvidia and Micron fell more than 1%.
Concerns were also heightened following Gina Hinojosa’s victory in the Texas governor’s race. Hinojosa has pledged an immediate moratorium on data centre construction in the state, a key hub for the industry.
“The rebound was in part due to the president’s initial tone and reaction to the results,” said Jay Woods, chief market strategist at Freedom Capital Markets.
“Still more uncertainty looms, but one thing is certain, there will be gridlock and historically this is good for the market,” he added.
Trump said he was “absolutely willing” to accept the election results in an interview with The New York Times. He also told The Wall Street Journal that he and Republicans would work with Democrats.
The Democratic victory is expected to provide a legislative check on Trump’s agenda, which has included business-friendly tax cuts alongside tariffs and policies that have contributed to inflationary pressures.
ADP Data shows private sector added 86,000 jobs in October
Investors also assessed fresh labour market data. Private companies added 86,000 jobs in October, according to payroll processing firm ADP, signalling continued stabilisation in employment.
The figure was unchanged from September’s downwardly revised total and came slightly ahead of the Dow Jones estimate of 75,000 jobs.
Gold, Silver rally as Dollar weakens
Precious metals rallied following the election results, with investors reassessing the potential implications of a divided government.
Spot gold rose 2.93% to $4,043.45 an ounce by 5:05 a.m. ET, while spot silver jumped 4.44% to $51.98 an ounce.
US gold futures advanced 2.9% to $4,054.60, while silver futures gained 4.64% to $52.09.
Among other precious metals, platinum climbed 2.47% to $1,465.30 an ounce, while palladium surged 5.93% to $989.
Meanwhile, the US dollar weakened against most major currencies. The euro gained 0.39% against the greenback to $1.1235, while the British pound advanced 0.48% to $1.3476.
Asia markets end mixed
Asian markets ended mixed on Wednesday as investors weighed the implications of the Democratic victory in the US midterm elections.
South Korea’s Kospi rose 0.62% to close at 5,683.8, while the small-cap Kosdaq gained 1.5% to 714.95.
Japan’s Nikkei 225 fell 1.42% to 62,188.63, while the broader Topix declined 0.89% to 3,895.38.
In China, the CSI 300 advanced 2.31% to 4,101.34. Hong Kong’s Hang Seng Index was up 1.43% in its final hour of trading.
Australia’s S&P/ASX 200 declined 0.59% to close at 8,834.5.
Investors are also tracking corporate earnings from companies including Arm Holdings, McDonald’s, Qualcomm, Novo Nordisk and Uber Technologies for indications of consumer demand and spending on artificial intelligence.
Dow soars 1,000 points as investors love Democrats’ midterm sweep; Wall Street rallies