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Stocks rally after Democrats march to midterm victories

World · 2 min · 1h ago · The Hill
Stocks rally after Democrats march to midterm victories
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Stocks rallied on Wednesday morning, after Democrats snatched back control of both chambers of Congress in the midterm elections.

The Dow Jones Industrial Average was up by 1,104 points nearly 30 minutes after the opening bell. The Nasdaq composite and S&P 500 were up by more than 500 and 120 points, respectively.

Stocks tanked to close out last week, as investors’ concerns over tech companies’ mounting debt amid the AI build-out spurred a sell-off.

Democrats charged to victory on Tuesday, flipping the Senate and House in resounding fashion. Decision Desk HQ has called 241 House seats for Democrats and 149 for Republicans, along with 54 Senate seats for Democrats and 44 for Republicans.

Democrats across the country campaigned on cost-of-living issues, capitalizing on Americans’ frustrations with high fuel prices and persistent inflation under President Trump.

Prices at the pump have risen during the Iran war, giving Democrats an opening to flip Senate seats in traditionally ruby-red states such as Iowa, Kansas and Texas.

History shows the S&P 500 typically rises after the midterms. After midterm elections from 1982 to 2022, the index was up by an average of 0.5 percent a day later, according to a CNBC analysis.

A week and a month after those elections, the S&P 500 was respectively up by 1 percent and 1.5 percent, per CNBC.

Democrats also flipped the House in 2018, during Trump’s first term. That year, the S&P 500 was up 2.1 percent a day after the midterms, but down 1.2 percent and 2.2 percent a week and month later, respectively, according to CNBC.

“Since 1928, the S&P 500 has posted an average return of +1.0% in November … gains were recorded 62% of the time … best November +12.0% and worst November -13.4%,” Liz Ann Sonders, the chief investment strategist at the Schwab Center for Financial Research, wrote Wednesday on the social platform X.

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