Dow jumps 1,569 points after the midterms as oil plunges below $95

Explain terms

What happened today

The S&P 500 rose 1.6% (119.70 points) to 7,688.62, its best day in three months. The Dow Jones Industrial Average rallied 1,569.40 points, or 3%, to 53,356.12. The Nasdaq Composite climbed 1.4% (364.50 points) to 25,736.51. All per AP.

The rally came the day after Democrats won majorities in both the House and the Senate. Hospital owners and dollar stores led a broad advance, while AI (artificial intelligence), defense and oil stocks fell, per AP.

Brent crude plunged 8.7% to $94.62 a barrel, after touching its lowest level in two months, per AP. The 10-year Treasury yield fell to 4.88% from 4.95% late Tuesday, per AP. Spot gold traded at $4,046.74 an ounce at 7:34 AM ET (6:34 AM CT), up about 3% at that point, per Reuters via Kitco.

The news, then the reaction

The midterm results, overnight into the open

Before: Overnight, Nasdaq 100 futures had fallen as much as 2.4% as results came in, before recovering, per Reuters (see our Breaking Brief).
The news: Democrats won control of both chambers of Congress.
After: Shortly after the open, at 8:35 AM CT, the Dow was up 1,178 points (2.3%) and the S&P 500 up 1.2%, per AP. The gains grew through the day.

ADP private payrolls (October), 7:15 AM CT

The news: Private employers added 86,000 jobs in October, according to ADP (Automatic Data Processing), above the 69,000 that economists polled by Reuters had expected. September was revised to 86,000 from 90,000.
After: Our sources did not tie a specific futures move to the release, which landed as markets were already rallying on the election results.

ISM services index (October), 9:00 AM CT

The news: The ISM (Institute for Supply Management) services index slipped to 54.5 from 54.9, a little below the 54.8 forecast, per Yahoo Finance. It was still a 28th straight month in expansion territory. S&P Global's final reading of its own US services PMI (Purchasing Managers' Index) came in at 56.1, revised down from its flash (preliminary) estimate and down from 58.8 in September.
After: A small miss on a day when politics and oil drove the market. Services are still growing, just more slowly.

Treasury quarterly refunding, 7:30 AM CT

The news: The Treasury dropped the words "at least" from its guidance and now expects to keep coupon and floating-rate auction sizes unchanged "for the next several quarters," per Reuters. Analysts read "several" as about two quarters, which would point to possible auction-size changes in the first half of 2027, per Reuters. Next week's sales were set at $58 billion of 3-year notes, $42 billion of 10-year notes and $25 billion of 30-year bonds, and the Treasury announced up to $70 billion of buybacks across the curve, per Reuters.
After: Yields fell on the day regardless; AP tied the drop to lower oil prices and less risk of more government borrowing.

Why it moved

Wall Street generally prefers split control of Washington because it lowers the odds of sweeping changes, AP reported, and stocks have generally done well in the months after midterm elections regardless of who wins. "Earnings trump elections."^{Brian Jacobsen, Annex Wealth Management}

Oil fell on the possibility that a Democratic-led Congress could push for a pullback in the war with Iran, AP reported. That hit oil companies: ExxonMobil fell 4.6% and ConocoPhillips 5.2%. Defense stocks fell too: Lockheed Martin dropped 6.9%, Northrop Grumman 4.5% and General Dynamics 2.6%, per AP.

AI stocks were under pressure as investors saw Democratic wins in Texas as possibly slowing the build-out of AI data centers. Nvidia fell 3.1% and was the heaviest weight on the S&P 500, and CoreWeave dropped 9.9%, per AP. Alphabet rose 3.2%, per AP. Trump Media & Technology Group fell 24.5%, Tesla 3.3% and SpaceX 3.8%, per AP.

Healthcare and discount retail led the gains, on the possibility that a Democratic-led Congress could try to reverse some cuts to federal healthcare and food assistance: HCA Healthcare rose 10.3% and Dollar Tree 9.6%. Solar stocks rose too, with First Solar up 4.6% and Enphase Energy up 3.7%, per AP.

Treasury yields fell as lower oil prices eased inflation worries, and AP said investors may also see less risk of Washington piling on more debt. Reuters said gold was lifted by a weaker dollar and by fiscal worries after the midterm results, per Kitco. "The elections appear to have boosted gold prices as investors become more worried about the fiscal outlook," though he expects a hawkish Federal Reserve to limit further gains.^{Hamad Hussain, Capital Economics}

CME (Chicago Mercantile Exchange) FedWatch showed an 82% chance of a Federal Reserve (Fed) rate hike in December, per Reuters on Wednesday morning.

A downbeat scenario is that President Trump becomes "not now a lame duck, but an angry duck" who restarts tensions over tariffs and NATO (North Atlantic Treaty Organization) allies' military spending; the optimistic one is a "tame duck" who slows disruptive efforts.^{Carsten Brzeski, ING Bank}

After the bell

Arm Holdings reported fiscal second-quarter revenue of $1.44 billion after the close, above the $1.38 billion analysts expected per LSEG (London Stock Exchange Group) data, on AI and data-center demand, per Reuters. Royalty revenue of $670 million missed estimates, and shares fell about 2% in extended trading. More in tomorrow's Morning Brief.
Qualcomm also reports after the bell. Its results weren't out when this Brief was published; watch tonight.

Tonight in Asia

Asia trades first on today's US rally. On Wednesday, Japan's Nikkei 225 fell 1.4% while Shanghai rose 2.2%, per AP.
Tokyo opens at 6:00 PM CT. Watch whether the AI and chip selling that hit Japan and Taiwan on Wednesday continues after Nvidia's drop.

Tomorrow

Time CT	Event	Consensus
6:00 AM	Bank of England rate decision	—
7:30 AM	Weekly jobless claims	—
7:30 AM	Q3 productivity and unit labor costs (preliminary)	—
Through the day	Fed speakers	—

Times from the Bank of England, the Labor Department and the BLS (Bureau of Labor Statistics) release schedules.

Friday brings the October jobs report at 7:30 AM CT; a Reuters poll expects 65,000 jobs and 4.2% unemployment.

What we're watching

Whether the rally holds once the election reaction fades, and whether oil stays below $95.
How Arm and Qualcomm results land for the chip trade after Nvidia's 3.1% drop.
Whether the 10-year yield keeps easing from 4.88%, and whether December hike odds move from 82% ahead of Friday's jobs report.
Whether gold holds above $4,000.

The short version (the what and the result)

The Dow rallied 1,569 points (3%), the S&P 500 rose 1.6% for its best day in three months, and the Nasdaq gained 1.4% after Democrats won both chambers of Congress.
Brent crude fell 8.7% to $94.62; oil, defense and AI stocks fell, while healthcare, dollar stores and solar rose.
The 10-year yield eased to 4.88%, and gold was up about 3% in the morning.
ADP came in at 86,000 jobs, ISM services slipped to 54.5, and the Treasury dropped "at least" from its auction guidance, which analysts read as a sign of possible changes in 2027.