Global stock markets experienced a significant rally following the U.S. midterm elections, driven by investor optimism over the Democrats’ gains in Congress and potential shifts in economic and energy policies. Concurrently, oil prices plummeted as expectations rose for reduced geopolitical tensions, particularly concerning the conflict with Iran.
In the United States, the S&P 500 climbed 1.7%, and the Dow Jones Industrial Average saw a substantial increase of over 3%, gaining around 1,600 points. The Nasdaq Composite also rose by 1.7%. Canada’s stock market mirrored these gains, with the S&P/TSX Composite Index increasing by 2.3% and the Canadian dollar strengthening against the U.S. dollar.
Brent crude oil prices dropped 8.7% to $94.62 per barrel, marking their lowest point in roughly two months. This decline was influenced by the belief that a stronger Democratic presence in Congress might pressure the Trump administration to adjust its stance on the Iran conflict.
The election results led to notable sector-specific movements. Healthcare companies and discount retailers posted strong gains as investors anticipated changes in healthcare funding and assistance programs. HCA Healthcare shares surged 10.9%, while Dollar Tree rose 8.7%. Renewable energy companies also benefited, with First Solar climbing 4.7% and Enphase Energy advancing 4.3%, amid expectations of increased political support for solar and wind power.
Conversely, defense contractors and major oil companies faced losses. Lockheed Martin shares declined 6.7%, Northrop Grumman fell 4%, and ExxonMobil dropped 4.9% due to falling crude prices.
Technology stocks had a mixed performance as investors weighed the potential for stricter regulations on artificial intelligence and enhanced scrutiny of data center investments. Nvidia shares fell 2%, and CoreWeave decreased by 9.6%. Tesla also lost 2.6%, while Trump Media and Technology Group experienced a sharp decline of 23.5%.
Meanwhile, U.S. Treasury yields decreased as the drop in oil prices alleviated inflation concerns. The yield on the 10-year Treasury note fell to 4.88% from 4.95%. Global markets also exhibited varied reactions, with stocks rising in Paris, Shanghai, and London, while Japan’s Nikkei 225 saw a decline of 1.4%.