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(AWP Alliance News) - Shares ended higher in New York on Wednesday after Democrats soundly defeated US President Donald Trump's Republicans in Tuesday's midterm election.
The Dow Jones Industrial Average closed up 1,569.40 points, 3.0%, at 53,356.12. The S&P 500 rose 119.70 points, 1.6%, to 7,688.62. The Nasdaq Composite ended up 364.50 points, 1.4%, at 25,736.51.
"Worries about AI spending and the war in Iran have evaporated as swiftly as Republican hopes of holding on to the Senate. Stock markets have indulged in a frenzy of buying now that the 'clearing event' of the mid-terms is out of the way. This turnaround might seem odd to even to the most cynical market veteran, but investors really do seem to love the prospect of a US government bogged down in infighting between the executive and the legislature. Maybe we can finally get on with that post mid-term rally after all," wrote IG Chief Market Analyst Chris Beauchamp.
"From the looks of it, it appears investors are pricing in an end to the war in Iran that will bring down oil prices and tame inflation, and make non-yielding assets like precious metals and cryptocurrencies great again. Brent's drop below USD100 is the totemic event that many had hoped for, matched by gold's recovery above USD4,000 that sees it back above the summer lows. Meanwhile, bitcoin seems to have carved out a higher low, and now investors will want to see a recovery in inflows to these assets in order for the rally to be sustained," Beauchamp added.
With many races still too close to call, including US Senate matchups in Alaska and Mississippi, Democrats hold a sharp lead, with 237 seats to the Republicans' 139 in the House of Representatives.
Election night saw historic victories in US states which had previously voted strongly in favour of Republicans, or had been considered key "swing states". These included Democratic Senate victories in Texas, Maine and Michigan.
Democrats made gains among demographics that had swung to support Trump in his 2024 victory. Particular strong inroads were made with nonwhite voters and those who hold only a high school degree, according to the New York Times.
Because of a favourable election calendar, the US Senate is likely to remain in Democratic control until 2032, also a presidential election year. US voters will choose their next president in 2028, following what is set to be a contentious intra-party 'primary' battle within both the Democratic and Republican electorates.
US President JD Vance offered a sober analysis of the loss: "The reason we lost is the [Iran] war. Everyone knows why we lost."
XTB analyst Kathleen Brooks noted that "traditionally US indices experience a strong rally after midterm elections".
"After the recent rout in stocks, especially AI linked stocks, the stage could be set for a strong performance into year end," she suggested.
AMD rose 1.0% after saying it expects server revenue to double year-over-year in 2027, and for data centre AI revenue to be more than 80% of total revenue in 2027. It projects the latter to drive the majority of revenue and earnings growth.
In August, AMD said it expected annual server revenue to grow more than 70% and data centre segment revenue to more than double for the year.
The announcement came alongside stronger than projected third quarter results. Revenue was up 45% to USD13.38 billion from USD9.25 billion, ahead of consensus of USD13.08 billion, driven by strong growth in the data centre and embedded segments, partially offset by a decline in the client and gaming segment.
Non-GAAP diluted EPS grew 74% to USD2.09 from USD1.20, beating consensus of USD1.95.
Nvidia closed down 3.2% and Broadcom gave back 2.0%.
Qualcomm on Wednesday announced an agreement with SpaceX to supply radio equipment, baseband units and software for Starlink Mobile's planned nationwide terrestrial 5G network.
SpaceX aims to establish a major nationwide US wireless carrier. Last month, Bloomberg reported that the firm was eyeing the acquisition of at least 80,000 cellular infrastructure sites across the US.
The Elon Musk-led company is in talks with infrastructure provider Crown Castle, the report said.
Qualcomm ended up 5.3%. SpaceX shed 3.9%.
Ford on Tuesday said total vehicle sales fell 0.8% in October to 174,123 from 175,584 a year prior. Of this, total electrified vehicles dropped 32% to 15,173 from 22,207 a year prior. Internal combustion sales rose 3.6% on-year to 158,950 from 153,377.
Ford gained 2.9%.
A barrel of Brent slid to USD95.02 late Wednesday from USD104.52 on Tuesday. West Texas Intermediate dropped to USD88.45 from USD96.89.
Gold was quoted at USD4,041.83 an ounce Wednesday, higher than USD3,933.38 on Tuesday.
The yield on the 10-year US Treasury fell to 4.89% from 4.97% late Tuesday. The 30-year yield was at 5.28%, down from 5.33%.
Against the dollar, the euro was at USD1.1231, up from USD1.1191. Sterling rose to USD1.3475 from USD1.3415. Against the yen, the dollar was at JPY158.44, down from JPY158.73.
In Europe, the FTSE 100 closed up 1.8% in London. The CAC 40 ended up 2.0% in Paris. The DAX 40 in Frankfurt rose 2.2%
In China, the Shanghai Composite Index gained 2.2%. The Hang Seng ended up 1.7% in Hong Kong. The Nikkei 225 in Tokyo fell 1.4%. The S&P/ASX 200 ended down 0.6% in Sydney.
Thursday's corporate calendar has third quarter results from Airbnb, Air France KLM and Atlassian, and a half year report from Microchip Technology.
The global economic calendar has US initial jobless claims, alongside the UK interest rate decision and Bank of Japan meeting minutes.
By Aidan Lane, Alliance News reporter
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