Live updates: Follow the latest news on US midterms
US stocks rallied on Wednesday after Democrats romped to power in both the House of Representatives and the Senate, while President Donald Trump's acceptance of the midterm election results eased fears of political uncertainty on Wall Street.
The Dow Jones Industrial Average had gained 1,570 points, or 3 per cent, by market close at 4pm ET . The S&P 500 and Nasdaq Composite rose 1.58 and 1.44 per cent, respectively.
Stocks extended their gains after Brent crude prices dipped more than 8 per cent to $95.22 a barrel after Vice President JD Vance blamed the Iran war for the Republican party's stunning defeat. West Texas Intermediate, which tracks US crude, fell 7.65 per cent to $88.74 a barrel.
A Democratic sweep threatens to challenge cryptocurrency, financial firms, Big Tech and AI titans that have until now benefited from the Trump administration's deregulation agenda. Holding control of the Senate also provides Democrats with vast oversight power.
“Lawyer up,” Robert Garcia, a Democrat from California and the party's top policymaker on the House oversight and government reform committee, posted on social media.
Big Tech shares were mixed. Nvidia closed down 3.14 per cent. Tesla and SpaceX were down 3.34 and 3.81 per cent, respectively, while Meta was up 1.44 per cent and Microsoft gained 6.68 per cent. Google's parent company Alphabet was trading 3.25 per cent higher.
Artificial intelligence was expected to be a particular point of focus after Democrats made inroads into Texas and Georgia, where some of the backlash against the AI buildout has been fiercest.
Aliasgar Tambawala, chief investment officer at the Klay Group, said a Democratic sweep is unlikely to derail the AI buildout or the billions of dollars in capex spending to fund it.
“Any legislation designed to materially restrict AI investment would still face President Trump's veto. He has been explicitly supportive of accelerating data centre construction, domestic technology investment, and reshoring manufacturing,” he said.
Mr Trump told The New York Times that he was “absolutely willing” to accept the midterm election results, and was prepared to work with Democratic politicians.
The US dollar fell against its group of 10 peers. Yields on the 10-year Treasury slid about 6 basis points to 4.88 per cent, with the yield on the 30-year Treasury sliding about 4 basis points to 4.128 per cent as investors expect Democrats to rein in government spending.
“We see the result as mildly bearish for the greenback,” Matthew Ryan, head of market research at Ebury, wrote in a note. “A Democratic Congress is likely to rein in Trump’s fiscally expansionary agenda, easing deficit concerns and taking some of the heat out of the Treasury sell-off.”
The price of Bitcoin rose 3.70 per cent to $80,198.62. Crypto corporations poured $206 million into the midterm elections, according to data compiled by Public Citizen. However, a $63 million push by crypto-backed political action groups to oppose a Democrat in Ohio's Senate race failed.
In Asia, equity benchmarks slid, reversing earlier gains.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5 per cent. South Korea's Kopsi slid 3.6 per cent, giving up its earlier gains of more than 3 per cent. Japan's Nikkei index fell 3.5 per cent, while the Hang Seng index in Hong Kong slipped 0.22 per cent. China’s Shanghai SE index also retreated by 0.21 per cent, while stocks in India dropped 0.13 per cent.
European stocks rebounded, with the pan-European STOXX 600 index up 1.85 per cent and Germany's Dax gaining 2.23 per cent. Britain's FTSE 100 gained 1.59 per cent.
