The Dow Jones Industrial Average gained more than 1,500 points, or 3%, on Wednesday — its best day since April 2025 — as Democrats secured control of both the House and Senate and West Texas Intermediate crude futures fell more than 8% to settle at $88.12 a barrel, CNBC reported.
Early Thursday, futures traded mixed: S&P 500 futures were down 0.2% and Nasdaq-100 futures declined 1.1%, while Dow futures rose 213 points, or 0.4%.
Midterm Sweep and Oil Drop Fuel Wednesday’s Surge
The rally followed Tuesday’s midterm elections, in which Democrats flipped both chambers of Congress with comfortable majorities and won a slew of governorships. Vice President JD Vance blamed the Iran war for the Republican losses, CNBC reported. USA Today reported that President Donald Trump accepted the election results and acknowledged the war’s role in the GOP’s defeat.
Consumer discretionary stocks led gains, with Walmart rising more than 3%. Asian markets showed mixed trading Thursday: Japan’s Nikkei 225 gained 0.49% and the Topix rose over 2%, while South Korea’s Kospi fell 2.33% and the Kosdaq dropped 1.24%, CNBC reported.
Data Center Stocks Slide on Election Backlash
Shares tied to the data center build-out fell amid worries about political opposition to the industry. CoreWeave dropped after Democrat Gina Hinojosa won the Texas governor’s race campaigning on tougher data center restrictions, CNBC reported. USA Today noted that IREN, Hut 8, Applied Digital, Nebius and CoreWeave all traded lower in premarket action.
Meanwhile, chipmaker AMD jumped 6.2% after forecasting faster-than-expected 2027 growth, and solar stocks including First Solar, up 8.1%, and SolarEdge, up 3%, rose as well, USA Today reported.
Analysts Caution Against Reading Rally as All-Clear
Jordan Watson, a portfolio manager at Tandem Investment Advisors, told CNBC that the rotation away from artificial intelligence names could be temporary. “We may be headed for more volatility as investors digest the election results and potential policy implications,” he said. “I wouldn’t view Wednesday’s equity trading as an all-clear signal, but rather a call for some sanity around the amount of capital being poured into the AI infrastructure build-out and whether those investments will generate the returns investors expect.”
Daniela Hathorn, senior market analyst at Capital.com, told USA Today that Trump’s acceptance of the results helped ease concerns about prolonged political confrontation, though his veto powers mean significant policy disagreements remain likely.
Markets Track Upcoming Labor Reports
Traders will watch Thursday’s weekly jobless claims report, with October’s nonfarm payrolls due Friday, CNBC reported. On the earnings front, Tapestry, Kimberly-Clark and ConocoPhillips report before the bell, followed by Airbnb and Akamai in the afternoon.
Questions Investors Are Asking After the Midterm Rally
Why did oil prices fall sharply on Wednesday? West Texas Intermediate crude futures dropped more than 8% to settle at $88.12 a barrel, contributing to the broad stock rally, CNBC reported.
Which Democrats won key races? Democrats flipped control of both the House and Senate, and Gina Hinojosa won the Texas governor’s race campaigning on tougher restrictions for data center development, CNBC reported.
What did Vice President JD Vance say about the losses? Vance blamed the Iran war for the Republican losses in the midterms, CNBC reported.
“Restrictions on the AI boom could inject significant uncertainty into the outlook for the US economy, inflation and monetary policy,” said Aidan Yao, senior investment strategist for Asia at the Amundi Investment Institute, in an interview with USA Today.