Stocks surge, oil tumbles after Trump's election rout
A trader works at his desk on the floor of the New York Stock Exchange (NYSE) at the opening bell in New York City on Nov 4, 2026. (Photo: AFP/Timothy A Clary)
NEW YORK: Wall Street stocks surged Wednesday (Nov 5) as markets greeted the resolution of US midterm elections while oil prices tumbled on expectations that the Democratic sweep could hasten a resolution to the US-Iran war.
Democrats seized control of both houses of Congress in a victory that gives them the power to block legislation, open investigations into Trump's administration and influence government budgets, including the Pentagon.
Heading into Tuesday's vote, some investors had viewed a decisive Democratic win as representing trouble for stocks, citing the risk to the buildout of artificial intelligence data centers.
But stocks bounced Wednesday as analysts said the election outcome resolved uncertainty and pointed to relief that Trump did not contest the results.
Oil prices were under pressure throughout the session, adding to losses after US Vice President JD Vance said in a social media post that the Republican defeat was due to the unpopularity of the Iran war, which has sent the prices of fuel and other staples soaring.
Crude prices finished the day down more than eight percent with both major contracts under US$100 a barrel.
"I think that the election might be leading the market to conclude that Trump might now be inclined to make a deal," said Andy Lipow of Lipow Oil Associates. "Also, with the Democrats in charge of the Senate and House, they may be inclined to restrict funding for the war, and that forces Trump into ending the conflict."
The drop in oil prices added momentum to Wall Street stocks, which opened higher following positive sessions on leading European exchanges.
All three major indices finished solidly higher, with the Dow ending up three per cent, or more than 1,500 points at 53,356.12.
Opposition to data centers fueled campaigns in key states like Texas, Georgia and Ohio where Democrats won gubernatorial elections previously held by Republicans.
But Wednesday's gains by Microsoft, Amazon and other hyperscalers suggest markets may see an upside to constraints that deter overbuilding, said Steve Sosnick of Interactive Brokers.
"At some level, people are happy that the industry might be saved from its own worst instincts," said Sosnick, who noted that Nvidia and other chipmakers fell following the results.
Both of Elon Musk's publicly traded companies fell after the billionaire's huge political donations failed to stop the Democratic tide. SpaceX fell 3.8 per cent and Tesla dropped 3.3 per cent.
Lockheed Martin, which lost 6.9 per cent, was among the defense companies that retreated, while First Solar jumped 4.6 as the election lifted the prospects for renewable energy.
Earlier, Europe's main indices finished with gains of around two percent despite official data Wednesday showing that eurozone inflation reached a three-year high of 4.0 per cent in October.
Markets across Asia also performed strongly, though Tokyo ended lower as its tech sector struggled.
