Global stock markets experienced a notable rally following the recent US midterm elections, with investors responding to the Democratic Party’s increased influence in Congress and the potential for shifts in economic and energy policies. As the markets surged, oil prices took a significant dip, reflecting hopes of eased tensions regarding the Iran conflict.
In the United States, the S&P 500 rose by 1.7%, while the Dow Jones Industrial Average jumped over 3%, adding around 1,600 points. The Nasdaq Composite also saw a 1.7% increase. Meanwhile, in Canada, the S&P/TSX Composite Index climbed by 2.3%, and the Canadian dollar gained strength against the US dollar.
Brent crude prices fell by 8.7% to $94.62 per barrel, marking their lowest level in nearly two months. This decline was fueled by expectations that the Democratic gains might pressure the Trump administration to reassess its stance on the Iran conflict.
The election results spurred notable sector-specific movements. Healthcare companies and discount retailers saw strong gains amid anticipated policy changes in healthcare funding and assistance programs. HCA Healthcare’s shares increased by 10.9%, and Dollar Tree’s rose by 8.7%. Renewable energy firms also benefited, with First Solar and Enphase Energy rising 4.7% and 4.3%, respectively, due to expected political support for solar and wind energy.
Conversely, defense contractors and major oil companies faced setbacks. Shares of Lockheed Martin and Northrop Grumman fell by 6.7% and 4%, respectively, while ExxonMobil dropped 4.9% amid the falling crude prices.
The technology sector experienced mixed results, with concerns about potential regulations on artificial intelligence and data center investments. Nvidia’s shares declined by 2%, and CoreWeave fell by 9.6%. Tesla also saw a 2.6% decrease, while Trump Media and Technology Group experienced a steep decline of 23.5%.
In the bond market, US Treasury yields decreased as the fall in oil prices alleviated some inflation concerns. The yield on the 10-year Treasury dropped to 4.88% from 4.95%. Internationally, European and Asian markets displayed varied responses, with market gains in Paris, Shanghai, and London, while Japan’s Nikkei 225 index fell by 1.4%.