Markets
Wall Street Rallies as Democrats Win Congress, With Renewables and Hospitals Up and Defense and AI Names Lower
Image: geralt via Pixabay
The Dow gained more than 1,300 points by late morning as investors bet a divided Washington limits sharp policy shifts.
By Emma Cruz ·
U.S. stocks rose sharply on Wednesday after Democrats took control of both chambers of Congress in the midterm elections, with investors sorting winners from losers by how exposed each industry is to a more divided government in Washington. As of 11:15 a.m. ET, the S&P 500 was up 1.5%, the Dow Jones Industrial Average had added 1,325 points, or 2.6%, and the Nasdaq composite was 1.7% higher, according to the Associated Press [1].
Reuters reported that stocks opened higher on the view that a split between the White House and Congress could restrain abrupt policy changes. At the opening bell the Dow was up about 998 points, the S&P 500 up 1.1% and the Nasdaq up 1.1% [2]. The gains widened through the morning, a sign that early caution about the political result gave way to relief.
Under the surface, the moves were uneven. Solar and clean-energy shares led the market on expectations that federal support for renewables will continue. The AP said First Solar was up 9.6% and Enphase Energy up 10.3% at 11:15 a.m. ET, while hospital operator HCA Healthcare gained 8.6% and Dollar Tree rose 9% [1]. In premarket trading, Reuters noted that insurers Centene and Molina were up 4.5% and 6%, and that Democrats may not have the votes to restore major parts of the Affordable Care Act but could seek concessions in budget talks [3].
Defense shares went the other way. The AP reported Lockheed Martin down 6.4%, Northrop Grumman down 4.5% and General Dynamics down 3% [1]. Reuters said the sector had been supported by expectations that President Donald Trump's $1.5 trillion budget request would meet no obstacles in a Republican Congress, an assumption the election result now challenges [3]. Energy producers also slipped as crude fell, with Exxon Mobil down 3.5% and ConocoPhillips down 4.4% [1].
Artificial intelligence was a notable pocket of weakness. Nvidia fell 1.8% and was the largest drag on the S&P 500, while CoreWeave dropped 8.6%, the AP said [1]. Reuters attributed the pressure on data center-related shares to expectations of more oversight of the AI buildout, including hearings and investigations, after Democrats also won races in Texas and Georgia, two states central to data center construction [3]. Kit Rees of Quilter told Reuters that AI has been a major engine for the U.S. economy, so any curbs on its development could be a risk to growth [3]. Shares of Trump Media & Technology Group fell 13.7%, extending a decline of 55.1% for the year before the day's drop, the AP reported [1].
Bond and commodity markets pointed to easing pressure. The yield on the 10-year Treasury note slipped to 4.92% from 4.95% late Tuesday, and Brent crude fell 4.4% to $99.03 a barrel, the AP reported [1]. Abroad, stocks in Paris rose 2.4%, Shanghai 2.2% and London 2%, while Japan's Nikkei 225 fell 1.4% [1].
Not every strategist saw the election as the main driver. Brian Jacobsen of Annex Wealth Management summed up his view for the AP in four words: "Earnings trump elections" [1]. AMD, which reported strong results on Tuesday, was up 0.5% at the same point [1].
What to watch next is how the sector split holds. A change in congressional control does not by itself change law. The next test is whether the rotation out of defense and AI infrastructure and into renewables and health care persists once the first wave of election-driven trading fades, and whether corporate earnings reassert themselves as the market's main focus.
Sources:
[1] Associated Press (via KY3), "US stocks rally, and the Dow soars more than 1,000 points", November 4, 2026. https://www.ky3.com/2026/11/04/stock-futures-rise-after-democrats-take-control-congress/?outputType=amp
[2] Reuters (via Investing.com), "Wall St opens higher as Democrats win Congress; data center stocks slide", November 4, 2026. https://investing.com/news/stock-market-news/wall-st-opens-higher-as-democrats-win-congress-data-center-stocks-slide-5000011
[3] Reuters (via Yahoo Finance), "AI data center stocks dip, renewables surge after Democrat sweep in US midterm elections", November 4, 2026. https://finance.yahoo.com/energy/articles/ai-data-center-stocks-dip-113427491.html
This article was produced with AI assistance. It is for informational purposes only and is not financial advice. StockVolt and its authors may hold positions in securities mentioned.