US stocks rally as traders welcome certainty post-midterm elections
Top stock market indexes were given a boost in early trading on Wednesday.
US stocks surged after Wall Street opened on Wednesday as President Donald Trump’s Republican Party suffered a series of defeats in the midterm elections.
Top stock market indexes were given a boost in early trading as traders appeared to welcome the post-election certainty in the world’s biggest economy.
The Dow Jones index gained around 1,200 points, jumping about 2.3% to its highest level in two months, while the Nasdaq was also up by around 2.5%.
The S&P 500 index was lifted by more than 1.5%.
Stronger trading across the pond helped deliver a boost to trading in the UK, with the FTSE 100 index surging by nearly 2% on Wednesday afternoon.
Experts said that US stocks typically jump following a midterm election, regardless of the outcome, because it provides investors with more certainty about the future.
Rachel Winter, partner at Kilik & Co, said: “The market is experiencing a sizeable post-election bump, thanks to the removal of the pre-election uncertainty and the fact that Donald Trump has not contested the result.”
She also pointed out that the result could have an impact on some tech stocks because of the potential for Democrats to push for more regulation to slow the pace of AI and data centre spending.
Ms Winter said: “Several polls have indicated that Democratic voters are more likely to oppose data centres, and new Democratic senators have been elected following campaigns that focused on greater restrictions on data centre construction.
“This is a potential problem for a variety of companies in this space, most notably CoreWeave, Oracle, SpaceX and Tesla.”
Shares in Elon Musk’s Tesla and SpaceX were down by around 3% and 3.5% on Wednesday, respectively.
CoreWeave was plunging by around 9%, while AI chipmaker Nvidia was down by about 2%.
On the other hand, big tech stocks such as Amazon and Microsoft saw their share price jump by more than 6%.