Global stock markets experienced a sharp rally following the U.S. midterm elections, as investors responded to the Democratic Party’s gains in Congress and the prospect of changes in economic and energy policies. This surge was accompanied by a significant drop in oil prices, driven by hopes of easing tensions in the Iran conflict.
In the United States, the S&P 500 rose by 1.7%, while the Dow Jones Industrial Average jumped by over 3%, adding approximately 1,600 points. The Nasdaq Composite also saw an increase of 1.7%. Canada’s S&P/TSX Composite Index climbed 2.3%, and the Canadian dollar strengthened against the U.S. dollar.
Brent crude oil prices fell 8.7% to $94.62 per barrel, marking their lowest point in around two months. This decline is attributed to expectations of increased Democratic influence in Congress potentially pressuring the Trump administration to reconsider its stance on the Iran conflict.
Sector-specific movements were also notable, with healthcare companies and discount retailers posting strong gains in anticipation of potential policy shifts in healthcare funding and assistance programs. HCA Healthcare shares rose 10.9%, and Dollar Tree saw an 8.7% increase. Renewable energy companies benefited from expectations of greater political support, with First Solar rising 4.7% and Enphase Energy advancing 4.3%.
Conversely, defense contractors and major oil companies faced declines. Lockheed Martin shares dropped 6.7%, Northrop Grumman fell 4%, and ExxonMobil decreased by 4.9% amid the falling crude prices.
The technology sector had mixed results, as investors weighed the potential for tighter regulations on artificial intelligence and increased scrutiny of data center investments. Nvidia shares fell 2%, CoreWeave dropped 9.6%, Tesla lost 2.6%, and Trump Media and Technology Group experienced a significant decline of 23.5%.
Additionally, U.S. Treasury yields decreased as the drop in oil prices alleviated inflation concerns, with the yield on the 10-year Treasury falling to 4.88% from 4.95%. European and Asian markets had varied performances, with stocks rising in Paris, Shanghai, and London, while Japan’s Nikkei 225 decreased by 1.4%.