Dow surges more than 1,500 points, its best day in 18 months, as Democrats win Congress and oil slides
The Dow rose about 3%, more than 1,500 points, on Wednesday after Democrats won both houses of Congress. Oil fell, Trump Media sank 17% and Nvidia slipped.
At a glance
- The Dow Jones Industrial Average jumped more than 1,500 points, about 3%, on Wednesday, November 4, and moved back above 53,000 for the first time since September 8, a day after Democrats won control of the House and the Senate.
- It was the Dow's best day in about 18 months and the biggest post-midterm gain in decades; the S&P 500 rose about 1.7–1.8% and the Nasdaq about 1.6–2.1% in afternoon trading.
- Solar companies, hospital owners, dollar stores and Microsoft and Amazon (each up more than 6%) led; Trump Media fell nearly 17%, Nvidia about 2% and Tesla 2%.
- US crude fell as much as 8%, to about $88 a barrel, after Vice President JD Vance blamed the Republican defeat on the Iran war.
- Analysts said investors welcomed gridlock: with President Trump holding a veto and Democrats short of 60 Senate votes, big tax and spending changes are unlikely.
US stocks had their strongest day in a year and a half on Wednesday, November 4, as investors cheered a split government in Washington. The Dow Jones Industrial Average climbed more than 1,500 points, or about 3%, and moved back above 53,000 for the first time since September 8, a day after Democrats won control of both the House of Representatives and the Senate.
The broader S&P 500 rose about 1.7% to 1.8% and the tech-heavy Nasdaq Composite between 1.6% and 2.1% during afternoon trading, depending on the hour. Research firm CFRA said the Dow was on course for its biggest single-day gain after a midterm election since 1982.
Why Wall Street likes a split Washington
The logic is old and simple. With Democrats running Congress and President Donald Trump holding a veto, neither side can push through sweeping changes to taxes or spending. Political gridlock has historically been good for markets for exactly that reason, analysts said.
"We do not expect sweeping policy changes," the Wells Fargo Investment Institute said. Stephen Brown of Capital Economics noted that Democrats lack a filibuster-proof 60 seats in the Senate and Trump can block their bills, so the near-term policy outlook changes little. Deutsche Bank's Jim Reid said the results looked "perfectly normal" by historical standards and that markets seemed to welcome that normality with a relief rally.
Trump's own reaction helped. After weeks of saying he might challenge results, he said he was willing to accept them, removing the risk of a drawn-out fight over the count.
Winners and losers on the day
| Moved up | Moved down |
|---|---|
| Microsoft, up more than 6% | Trump Media & Technology, down nearly 17% |
| Amazon, up more than 6% | Nvidia, down about 2% |
| Solar-power companies | Tesla, down about 2% |
| Hospital owners | SpaceX shares, down 3.4% |
| Dollar stores and financials | CoreWeave and data-centre names |
The losers had something in common. Trump Media, the president's social media company, tends to trade on his political fortunes. Nvidia and other artificial intelligence names fell on worries that a Democratic Congress, and Democratic states, could slow the build-out of power-hungry data centres. "The Democratic blue tidal wave across the Senate and House was a seismic shift," said Dan Ives of Yorkville, who expects it to slow the pace of AI investment.
LPL Research's Jeff Buchbinder was less worried, pointing out that most decisions on data centres sit with states and utilities. He said the build-out would continue but might slow somewhat.
Asian markets had moved the other way earlier in the day: Tokyo's Nikkei fell 3.6% and Seoul's Kospi 3% as chip and AI stocks were sold on the same fear.
Oil drops after Vance blames the Iran war
Energy prices added to the mood. US crude futures fell as much as 8% to about $88 a barrel after Vice President JD Vance wrote on X that the Iran war was the reason Republicans lost. Trump said Vance's view was "largely true", and traders took it as a sign the White House may look harder for a way out of the conflict.
The national average petrol price in the US was $4.12 a gallon, according to motoring group AAA, $1.14 more than before the war began in February but 24 cents lower than a month ago. GasBuddy's Patrick De Haan said the average could fall below $4 within a week.
What it means outside the US
For Pakistan and other fuel importers, cheaper crude is the part that matters most. A sustained drop in oil prices would ease pressure on the import bill and on the next fortnightly petrol and diesel price review, though Iran's grip on the Strait of Hormuz still keeps freight and insurance costs high.
A weaker push for AI spending would hit chipmakers in Taiwan, South Korea and Japan hardest, as Wednesday's Asian sell-off showed.
History says the rally can last
Edward Jones calculates that the S&P 500 has risen an average of 15.5% in the six months after each of the last 14 midterm elections since 1970. The next political test is close: the Senate races in Alaska and Mississippi had still not been called on Wednesday.
Questions people are asking
Why did the stock market go up after the 2026 midterms?
Investors expect a divided government, with Democrats in charge of Congress and Donald Trump in the White House, which usually limits sweeping tax and spending laws. Falling oil prices and Trump's acceptance of the result added to the rally.
Do stocks usually rise after midterm elections?
Historically, yes. Edward Jones says the S&P 500 has risen an average of 15.5% in the six months after the last 14 midterm elections since 1970.
