The Democratic midterm sweep set off a broad rally on Wall Street Wednesday, lifting the Dow Jones Industrial Average to its strongest session in more than a year as President Donald Trump signaled he would accept the results.
The blue-chip index climbed 3% to settle at 53,356.12, its largest one-day percentage advance since April 9, 2025. The S&P 500 gained 1.6% to 7,688.62, and the Nasdaq Composite added 1.4% to 25,736.51.
Election Outcome and Market Reaction
According to Associated Press tallies, Democrats captured 54 Senate seats and 237 House seats, ending Republican control of both chambers. The AP had not yet called two Senate contests and 59 House races as of late Wednesday afternoon.
Trump told The New York Times he was willing to accept the outcome and looked forward to working with Democrats. Vice President JD Vance, writing on X, attributed the Republican defeat to the Iran war.
Eight of the 11 S&P sectors finished higher, with consumer discretionary stocks leading the way. Energy and industrials were the only sectors to close lower.
Oil Slides as Peace Deal Prospects Brighten
Crude prices fell sharply as Rystad Energy suggested a US-Iran peace deal had become more likely after the election result. West Texas Intermediate dropped 7.7% to $88.67 a barrel in late-afternoon trading, while Brent slid 8.1% to $95.26.
Rystad Chief Economist Claudio Galimberti said the administration now faces stronger institutional pressure to pursue a Hormuz agreement instead of another round of strikes, adding that restored flows through the Strait of Hormuz are needed before Middle East crude supply and refined product inventories can return to normal.
Tech and AI Spending Under Scrutiny
Saxo Bank strategist Koen Hoorelbeke said a Democratic Congress would likely increase scrutiny of technology and artificial intelligence spending. Shares of SpaceX, Tesla and CoreWeave all declined.
Morgan Stanley said in a client note that the Democratic victory could weigh on AI sentiment amid expectations for tighter restrictions on data center construction.
Corporate Movers and Economic Data
McDonald’s rose 6.5%, one of the Dow’s biggest gainers, after third-quarter earnings and comparable sales topped expectations. The fast-food chain also reported positive US same-store sales in September, helped by value-focused initiatives.
Datadog fell 14%, among the S&P 500’s worst performers, after the cloud monitoring and security company issued a soft fourth-quarter revenue forecast that pointed to slowing growth, even though third-quarter results beat Wall Street estimates.
On the economic front, ADP data showed US private-sector employment growth exceeded expectations for October, with pay gains holding steady.
Bonds, Metals and Fiscal Risks
Treasury yields moved lower. The two-year rate fell 3.7 basis points to 4.58%, and the 10-year rate declined 6.2 basis points to 4.89%. Spot gold rose 3.4% to $4,062.12 per troy ounce, while silver jumped 5% to $52.22 an ounce.
Oxford Economics warned that a government shutdown could begin next month, with funding set to lapse after Dec. 11. The firm said such a shutdown would likely prompt it to cut its fourth-quarter GDP forecast and possibly its estimate for the first quarter of 2027, depending on how long it lasts.
Oxford expects Democrats to push another stopgap funding measure that would defer the spending fight into next year, when they will have more influence over the agenda. Republicans, by contrast, are expected to seek an omnibus package funding the government through the end of fiscal 2027.