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Markets News, Nov. 4, 2026: Dow Jumps Nearly 1,600 Points
as Stocks Soar After Democrats’ Decisive Win in Midterms; WTI Oil Slides 8%
The results of Tuesday’s vote had a widespread and varied impact on the U.S. stock market Wednesday.
Major stock indexes surged Wednesday after Democrats snagged control of Congress and won several key gubernatorial races in the midterm elections.
The Dow Jones Industrial Average closed 3% higher, while the tech-heavy Nasdaq Composite and benchmark S&P 500 climbed 1.4% and 1.6%, respectively. Yesterday, the S&P 500 and Nasdaq snapped three-session losing streaks, while the Dow finished slightly lower. Today’s 1,569-point gain for the Dow represented the 5th-largest one-day points increase for the blue-chip index, topping the 1,500 point increase recorded the day after President Trump’s election to a second term in November 2024.
Stock futures had fallen sharply in after-hours trading Tuesday as the election results were being tabulated but reversed course this morning once the magnitude of the win by Democrats became apparent.
With its strong majority in both the House of Representatives and the Senate, the party is likely to challenge the Trump administration’s tariff policies and take steps to end the Iran war, which could help tame inflation.
The Democrats likely will seek to reverse cuts to Medicaid and Medicare, and to slow Trump’s efforts to rescind regulations. The prospect for big policy changes had a widespread and varied impact on U.S. stocks today.
Big Tech stocks were among the top gainers in the Dow, with Microsoft (MSFT) rising 7%, while Amazon (AMZN) and Apple (AAPL) added 6% and 5%, respectively. Shares of 3M (MMM) paced Dow advancers, rising more than 9%, while McDonald’s (MCD) and Amgen (AMGN) rose a respective 6% and 4%, after reporting better-than-expected quarterly results.
Meanwhile, several AI-related stocks lost ground today amid concerns that the pace of AI development could slow with tighter regulations. Chip giants Nvidia (NVDA) and Broadcom (AVGO) dropped 3% and 2% respectively, while memory storage suppliers Micron (MU) and SanDisk (SNDK) each slid more than 7%, and cloud computing provider Coreweave (CRWV) plunged 10%.
Shares of Elon Musk’s two AI-focused companies, Tesla (TSLA) and SpaceX (SPCX), declined 3% and 5%, respectively, on worries that Musk’s government contracts and an expected merger between the two companies could face heightened scrutiny.
Defense stocks also retreated following the shift in the balance of power in Washington. Shares of Northrop Grumman (NOC) fell 4.5%, Lockheed Martin (LMT) tumbled 7%, and Palantir (PLTR), a data analytics company that does big business with U.S. defense agencies, dropped 2%.
In other markets, WTI futures, the U.S. oil price benchmark, were down nearly 8% recently at $88.55 per barrel, trading at their lowest levels in nearly two months, as investors place bets on how the Iran war will play
out after the midterms. The surge in oil prices owing to the war has been the primary factor contributing to a rise in inflation this year.
Gold futures rose 3.3% to $4,070 an ounce. Bitcoin was trading at $80,100, up from yesterday’s low of $76,300, as investor risk appetite increased following the election.
The yield on the 10-year Treasury note, which affects interest rates on a wide range of consumer loans, fell to 4.89% from 4.97% at yesterday’s close and near its lowest level in more than a year.
What’s Likely to Change for the Economy After Midterms?
A blue wave swept Republicans from power in both chambers of Congress Tuesday, but voters may find that the White House still holds sway over many of the policies that fueled their discontent.
Democrats took the House and Senate Tuesday, flipping Republican Senate seats in states including Texas, Ohio, and Kansas. President Donald Trump said Wednesday he’d work with the new Congressional leaders, but reminded them he could send their bills back “with a nice stamp veto.”
Economists spent Wednesday making a similar point. The size of the win “does not change too much for the near-term policy outlook,” Stephen Brown of Capital Economics wrote to investors, citing the Senate filibuster and Trump’s veto power as limiting Democrats’ ability to pass bills that turn into law.
Still, the wave of Democratic victories changes who writes the spending bills, who votes on new Federal Reserve board members, and potentially where new data centers get built.
Which Sectors Will Be Affected by the Democrats’ Sweep?
Defense, prisons, crypto, and anything with Elon Musk’s name on it rallied during Republicans’ two-year trifecta. On Wednesday, traders were figuring out what comes next.
The Democrats’ midterm win lifted some political uncertainty that had hung over Wall Street, and that reverberated across stock markets.
Markets “like gridlock,” said Andrew Slimmon of Morgan Stanley Investment Management, since it makes more regulations and new policies unlikely. LPL Research finds the S&P 500 has gained an average of 15% in the 12 months after every midterm since 1950. (Here’s more on what history says usually happens to stocks after midterms.)
Wednesday’s trading provided a snapshot of how investors see the change in Washington political power affecting the outlook for businesses. Solar and health insurers were up, while defense contractors, private prisons, and Musk’s companies were down.
Goldman Sachs analysts said Democratic state-level wins made data-center moratoriums more likely, potentially affecting about 45% of planned U.S. data-center capacity. Yorkville Ives analyst Dan Ives estimated on X that 10% of planned data centers get built now. “Some investors will like the ‘slower pace’ ... others view it as adding risk,” he wrote.
That’ll mean a big revenue hit for chipmakers, neoclouds, and builders. For the hyperscalers, a slowed data-center buildout means lower capital spending, fears of which pushed the Nasdaq 100 into correction territory earlier this week. Citi’s Scott Chronert told Reuters a slower buildout changes “the fundamental trajectory for many of those suppliers.” Franklin Templeton’s Stephen Dover said the election is unlikely to reverse demand for AI infrastructure but “could change where facilities are built, how quickly projects proceed and who pays.”
Read the full article here.
Why Tesla and SpaceX Shares Are Sliding After the Midterms
It will take some time to know for sure the stock-market winners and losers of yesterday’s midterm elections. Today, investors think one of the losers was Elon Musk.
Shares of both of his public companies were falling in Wednesday trading: SpaceX (SPCX) and Tesla (TSLA) were down more than 3% recently, in the wake of an election in which Democrats retook both chambers of Congress, establishing an empowered opposition to President Donald Trump during the second half of his term—and on a day when stocks broadly chugged higher.
Musk, to be sure, remains the world’s richest person, with a net worth recently estimated at more than $870 billion. His influence is still massive, spanning touchpoints across the corporate, consumer and government sectors.
But investors may now wonder whether the shift of power in Washington could bring freshly intensified scrutiny of his interests. Some Democrats have said they would seek to investigate Musk in his role as federal contractor, notably given the role SpaceX plays in satellite-based connectivity. Market watchers now wonder whether a generally expected move to merge SpaceX and Tesla might hit more roadblocks—or, at least speedbumps; some had wondered whether he might have sought to announce a deal before the elections.
Musk donated heavily to Republicans in the midterms, according to reports, including some who lost—notably, in Texas, where some of his businesses are headquartered. One analysis pegged him as the top donor this midterm cycle, with spending of over $400 million. “Guess my election-interfering space lasers didn’t work this time,” Musk wrote on social media.
With today’s losses, Tesla shares are down 14% so far in 2026, making them the biggest decliner among Magnificent 7 stocks. SpaceX shares, which recently exchanged hands at $137, remain well below the $150 they started trading at in June after a record-setting IPO.
What Usually Happens to Stocks After Midterm Elections?
For investors, there are plenty of reasons to believe Tuesday’s electoral outcomes—the Associated Press now has the Democrats holding majorities in the House and Senate, with some races not yet called—could affect federal and lower-level U.S. policy.
Investors are already seeing near-term changes in the price of stocks viewed as helped or hurt by policy decisions and the redrawn balance of power; in commodities like oil and gold that stand to be affected by geopolitical or economic news; and even in cryptocurrency. At a market level, BlackRock recently wrote, stocks tend not to have their best results in midterm election years.
But many market experts think that, by and large, who’s in charge—President Donald Trump still has half his term to serve—may not matter much to investors’ portfolios.
Bespoke Investment Group has urged a cool head, noting that since the Great Financial Crisis, despite a range of different combinations of party primacy in Washington, stocks have continued to rise. “While power in DC has changed hands again and again, there has been one constant: the S&P 500 has risen during every one of the last nine sessions,” its analysts wrote.
And Franklin Templeton recently said that under Republican presidents, the composition of Congress after the midterms seems to have comparatively little effect on returns: The average 12-month return for stocks, no matter how the houses are arrayed, has been around 15% since the 1950s. (In that timespan, their research said, a setup like today’s, in which the Democrats have majorities in both houses of Congress, has been the most typical.)
The stock market has not declined between Nov. 1 in a midterm year through April of the next year since the 1930s, according to SentimenTrader. (All this said, however, historical precedent is just that; it’s not a prediction.)
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