Dow Jumps More Than 1,000 Points as Investors Digest Democratic Midterm Wins

Stocks rose sharply on Wednesday as investors reacted to Democratic victories in the midterm elections, with the Dow Jones Industrial Average gaining more than 1,000 points, according to the Associated Press, CNBC and Yahoo Finance.

The numbers

The Dow rose roughly 2.1 to 2.2 percent during the session. The S&P 500 gained between about 1.1 and 1.6 percent, and the Nasdaq composite rose between 1 and 2 percent, according to those reports. Final closing figures may differ slightly from intraday readings.

Why investors bought

Market strategists quoted by CNBC pointed to a familiar pattern: investors often welcome divided government because it makes sweeping policy changes less likely. With Democrats controlling Congress and President Donald Trump in the White House, analysts expect fewer major tax or spending overhauls in the next two years.

Uncertainty also eased. Before the vote, traders had been bracing for a range of outcomes. A clear result, even one that reshaped Congress, removed some of that doubt.

Winners and losers

Health insurance stocks were among the strongest performers, CNBC reported, as investors bet that Democrats would block further cuts to federal health programs.

Solar and other clean energy stocks also rose, on expectations that Democrats would resist efforts to roll back tax credits for renewable power.

Semiconductor stocks lagged the broader market. Shares of Tesla and SpaceX fell, according to CNBC and Bloomberg, after candidates backed by Elon Musk lost several high-profile races.

Gold and bonds

Gold traded around $4,043 an ounce, according to market data cited by Yahoo Finance. Prices have climbed sharply over the past two years as central banks and investors sought safe assets.

Investors were also watching Treasury yields and the dollar for signs of how markets view the outlook for government borrowing.

What comes next

Attention now shifts to economic data. The government’s monthly jobs report is due Friday, and the Federal Reserve’s next policy meeting is scheduled for Dec. 8 and 9.

Analysts cautioned that post-election rallies sometimes fade, and that corporate earnings, inflation and interest rates usually matter more to stocks over time than election results.

Sources: Associated Press, CNBC, Bloomberg, Yahoo Finance, Federal Reserve.