Stocks surge, and the Dow soars 1,500 points as oil prices tumble
following the US midterm elections
[November 05, 2026] By
STAN CHOE and DAVID McHUGH
NEW YORK (AP) — U.S. stocks soared Wednesday after President Donald
Trump’s party lost its sole control of Washington in the midterm
elections.
Stocks generally do well in the months following any midterm U.S.
election, regardless of who wins, and the S&P 500 jumped 1.6% for its
best day in three months. The Dow Jones Industrial Average rallied 1,569
points, or 3%, and the Nasdaq composite climbed 1.4%.
Stocks of hospital owners and dollar stores serving low-income Americans
helped lead the widespread rally following the nationwide losses for
Republicans. Investors, meanwhile, see risks ahead for Trump’s
social-media company, the artificial-intelligence industry and
businesses owned by Elon Musk, who donated heavily to Republicans.
The price for a barrel of Brent crude oil also tumbled below $95 and
touched its lowest level in two months. Vice President JD Vance blamed
Republicans' midterm losses on the war with Iran, which caused a spike
in oil prices.
Strategists along Wall Street had been urging investors not to get swept
up in the election because it may not matter much for the broad market
in the long term. Prices for stocks depend more on where profits for
companies and interest rates are heading than on who controls what in
Washington.
“Earnings trump elections,” according to Brian Jacobsen, chief economic
strategist at Annex Wealth Management.
Still, Wall Street may have gotten a preferred political scenario as
Democrats are set to take control of both the Senate and the House of
Representatives. Wall Street generally prefers split control of
Washington because it lessens the risk of transformative changes to the
economy.
Much remains impossible to predict, of course, and Trump retains
executive authority over key areas such as defense, foreign policy and
in some instances trade.
A downbeat forecast could be that “Trump is not now a lame duck, but an
angry duck” who might restart tensions over tariffs and NATO allies’
levels of military spending, said Carsten Brzeski, global chief of macro
at ING Bank.
An optimistic view, Brzeski said, is that Trump becomes “a tame duck ...
that he will slow down any disruptive efforts and that he will put more
focus on trying to win the Nobel Peace Prize by ending the two big wars
without big disruption, and on trade, nothing happens but a few words.”
All told, the S&P 500 rose 119.70 points to 7,688.62. The Dow Jones
Industrial Average rallied 1,569.40 to 53,356.12, and the Nasdaq
composite climbed 364.50 to 25,736.51. Here’s a look at some of the
moves that rippled through financial markets:
Trump Media and Tesla sank
Trump’s social-media company, Trump Media & Technology Group, was one of
the market’s bigger losers, down 24.5%.
Since briefly touching a peak of $175 five years ago, it’s dropped to
$4.49. Its main business is Truth Social, which is most well known for
Trump’s postings on the platform.
Elon Musk’s businesses also struggled. Tesla fell 3.3%, and SpaceX sank
3.8%. Musk, a former top Trump adviser, is among the possible targets
for investigations by a Democratic-controlled Congress.
AI companies in general are under pressure
Trump has been a big backer of the AI industry, and Democratic victories
could mean more regulation or restrictions. Concerns have grown across
political parties about AI in general.
Investors see Democratic wins in Texas in particular as possibly slowing
the further build out of AI data centers. AI-related stocks came into
Election Day already under pressure because of worries their prices had
shot too high.
Nvidia, the chip company that quickly became the poster child of the
frenzy around AI-related stocks, sank 3.2% and was the heaviest weight
on the S&P 500. CoreWeave, a company that rents out access to AI chips
to customers over the cloud, dropped 9.9%.
[to top of second column] |
Options traders Ilya Bosinzon, left, and Justin Kanda work on the
floor of the New York Stock Exchange, Wednesday, June 3, 2026. (AP
Photo/Richard Drew, File)
 Companies that have been spending
heavily on AI chips held up better. Alphabet rose 3.2%, for example.
The parent company of Google had tumbled to its worst loss ever last
Thursday on worries that it was spending too much on AI investments.
Military suppliers felt pressure
A Democratic-led Congress could push Trump to pull back on the war
with Iran.
That hurt stocks of companies that make weapons and other equipment
for the U.S. military, including drops of 6.9% for Lockheed Martin,
4.5% for Northrop Grumman and 2.6% for General Dynamics.
Oil prices tumbled, and green energy companies rose
The possibility of pressure to pull back on the war sent the price
for a barrel of Brent crude oil plunging 8.7% to $94.62. That in
turn hurt stocks of big oil companies, which had been rallying for
much of the year. ExxonMobil fell 4.6%, and ConocoPhillips dropped
5.2%.
Falling oil prices usually hurt stocks of renewable-energy companies
because they can lessen the incentive to switch to other energy
sources. But Democratic control of Congress could light the way for
companies in the solar and wind industries.
First Solar rose 4.6%, and Enphase Energy climbed 3.7%.
Healthcare stocks and dollar stores also rallied
A Democratic-led Congress could try to reverse some of the cuts to
federal healthcare and food assistance that Republicans approved in
their “One Big Beautiful Bill Act.”
That helped stocks climb across the healthcare industry, including a
10.3% rise for HCA Healthcare, which runs hospitals and ambulatory
sites.
Retailers also benefited on hopes that Democrats may push policies
to help Americans who are struggling to keep up with the fast-rising
cost of living. Dollar Tree, which focuses in particular on
lower-income Americans, rose 9.6%.
Bond yields tumbled
In the bond market, Treasury yields sank as oil prices dropped and
took pressure off inflation. The move could also be a signal that
investors see less risk of Washington piling more debt onto its
already big mountain with the coming end to one-party control.
Treasury yields had climbed through the summer and reached their
highest levels in decades because of worries about the U.S.
government’s big debt, along with high inflation and other concerns.
A Congress controlled by Democrats could provide a check against
more spending and cuts to taxes that would widen Washington’s
deficit.
The yield on the 10-year Treasury dropped to 4.88% from 4.95% late
Tuesday.
Stocks jumped in much of the world
Indexes climbed across most of the world. Stocks leaped 2% in Paris,
2.2% in Shanghai and 1.8% in London. Japan’s Nikkei 225 was an
outlier and fell 1.4%.
___
AP Writer Elaine Lai contributed to this report from Hong Kong, and
McHugh contributed from Frankfurt, Germany.
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