Wall Street stocks rallied on Wednesday after Democrats secured control of both chambers of Congress in the US midterm elections, easing political uncertainty and boosting investor appetite for equities.
A sharp decline in oil prices also supported the broader market, although concerns about tighter regulations on data centres weighed on parts of the artificial intelligence (AI) infrastructure sector.
The Dow Jones Industrial Average surged 3.03%, or 1,569.40 points, to close at 53,356.12.
It moved above the 53,000 mark for the first time since September 8 and recorded its strongest daily performance since April 9, 2025.
The S&P 500 gained 1.58% to finish at 7,688.62, while the Nasdaq Composite advanced 1.44% to 25,736.51.
Democrats’ victories in the House of Representatives and Senate are expected to create a divided government, potentially limiting the administration’s ability to advance its policy agenda.
Investors had been assessing the potential implications of the election for business taxes, tariffs, energy policy and technology regulation.
Oil prices fall as Iran war uncertainty eases
Stocks extended their gains as US crude oil futures fell more than 8%, while Brent crude futures also declined by more than 8%.
The drop followed comments from Vice President JD Vance linking the Republican Party’s election losses to the Iran war.
The election outcome increased expectations that political pressure to end the conflict could intensify, potentially reducing concerns about supply disruptions and elevated energy costs.
Lower oil prices helped support sentiment across the broader market, particularly as investors remained concerned about inflation and the impact of higher energy costs on consumers and businesses.
The US dollar weakened against most major currencies, while yields on longer-dated Treasury bonds moved lower.
AI stocks split as data centre concerns grow
Technology and AI-related shares recorded mixed performances as investors assessed the potential impact of Democratic victories on the industry’s infrastructure expansion.
Large technology companies, including Amazon, Meta Platforms and Alphabet, advanced.
Investors appeared to favour cash-rich technology companies that could benefit if a slower pace of AI infrastructure investment reduces their capital requirements.
However, data centre operators and some infrastructure suppliers came under pressure amid concerns about tighter regulation and potential delays to new projects.
The election of Democrat Gina Hinojosa as Texas governor added to these concerns.
Hinojosa has pledged an immediate moratorium on data centres in the state, which is a major hub for the industry.
Shares of IREN and Hut 8 fell sharply, while Applied Digital and Core Scientific also declined.
CoreWeave and SpaceX were among the other companies trading lower.
The Philadelphia Semiconductor Index fell to a six-month low.
AMD shares also declined despite the chipmaker forecasting faster-than-expected growth in 2027, supported by stronger data centre sales.
Investors assess divided government outlook
The election results also supported gains in companies outside the technology sector.
Walmart shares rose 4%, while Bank of America gained 3%, as investors looked towards consumer and financial stocks.
Consumer discretionary stocks led gains among S&P 500 sectors, while energy shares declined.
Solar and clean-energy stocks advanced on expectations that a Democratic-controlled Congress could help preserve federal support for clean-energy development.
Defence stocks, including Northrop Grumman, RTX and Lockheed Martin, fell as investors considered the possibility that President Donald Trump’s proposed $1.5 trillion defence budget could face greater resistance in Congress.
AI disclosure: AI tools assisted with research and drafting of this piece. An Invezz editor reviewed the facts, sources and wording before publication. Any opinions or analysis are Invezz’s, not those of an automated system.
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