Stock market rallies as oil prices tumble
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NEW YORK (AP) -- U.S. stocks soared Wednesday after President Donald Trump’s party lost its sole control of Washington in the midterm elections.
Stocks generally do well in the months following any midterm U.S. election, regardless of who wins, and the S&P 500 jumped 1.6% for its best day in three months. The Dow Jones Industrial Average rallied 1,569 points, or 3%, and the Nasdaq composite climbed 1.4%.
Stocks of hospital owners and dollar stores serving low-income Americans helped lead the widespread rally following the nationwide losses for Republicans. Investors, meanwhile, see risks ahead for Trump’s social-media company, the artificial-intelligence industry and businesses owned by Elon Musk, who donated heavily to Republicans.
The price for a barrel of Brent crude oil also tumbled below $95 and touched its lowest level in two months. Vice President JD Vance blamed Republicans’ midterm losses on the war with Iran, which caused a spike in oil prices.
Strategists along Wall Street had been urging investors not to get swept up in the election because it may not matter much for the broad market in the long term. Prices for stocks depend more on where profits for companies and interest rates are heading than on who controls what in Washington.
“Earnings trump elections,” according to Brian Jacobsen, chief economic strategist at Annex Wealth Management.
Still, Wall Street may have gotten a preferred political scenario as Democrats are set to take control of both the Senate and the House of Representatives. Wall Street generally prefers split control of Washington because it lessens the risk of transformative changes to the economy.
Much remains impossible to predict, of course, and Trump retains executive authority over key areas such as defense, foreign policy and in some instances trade.
A downbeat forecast could be that “Trump is not now a lame duck, but an angry duck” who might restart tensions over tariffs and NATO allies’ levels of military spending, said Carsten Brzeski, global chief of macro at ING Bank.
An optimistic view, Brzeski said, is that Trump becomes “a tame duck … that he will slow down any disruptive efforts and that he will put more focus on trying to win the Nobel Peace Prize by ending the two big wars without big disruption, and on trade, nothing happens but a few words.”
All told, the S&P 500 rose 119.70 points to 7,688.62. The Dow Jones Industrial Average rallied 1,569.40 to 53,356.12, and the Nasdaq composite climbed 364.50 to 25,736.51. Here’s a look at some of the moves that rippled through financial markets:
Trump’s social-media company, Trump Media & Technology Group, was one of the market’s bigger losers, down 24.5%.
Since briefly touching a peak of $175 five years ago, it’s dropped to $4.49. Its main business is Truth Social, which is most well known for Trump’s postings on the platform.
Elon Musk’s businesses also struggled. Tesla fell 3.3%, and SpaceX sank 3.8%. Musk, a former top Trump adviser, is among the possible targets for investigations by a Democratic-controlled Congress.
The possibility of pressure to pull back on the war with Iran sent the price for a barrel of Brent crude oil plunging 8.7% to $94.62. That in turn hurt stocks of big oil companies, which had been rallying for much of the year. ExxonMobil fell 4.6%, and ConocoPhillips dropped 5.2%.
A Democratic-led Congress could try to reverse some of the cuts to federal healthcare and food assistance that Republicans approved in their “One Big Beautiful Bill Act.”
That helped stocks climb across the healthcare industry, including a 10.3% rise for HCA Healthcare, which runs hospitals and ambulatory sites.
Retailers also benefited on hopes that Democrats may push policies to help Americans who are struggling to keep up with the fast-rising cost of living. Dollar Tree, which focuses in particular on lower-income Americans, rose 9.6%.