Global stock markets experienced a notable rally following the recent US midterm elections, as investors reacted to the Democrats’ gains in Congress and their potential impact on economic and energy policies. The elections have led to expectations of policy shifts, which have significantly influenced market movements across various sectors.
In the United States, the S&P 500 rose by 1.7%, while the Dow Jones Industrial Average surged over 3%, marking an increase of approximately 1,600 points. The Nasdaq Composite also advanced by 1.7%. Canada saw similar positive trends, with the S&P/TSX Composite Index climbing 2.3% and the Canadian dollar gaining strength against its US counterpart.
Oil prices saw a sharp decline, with Brent crude dropping 8.7% to $94.62 per barrel, reaching its lowest level in about two months. This decrease was attributed to the expectation that increased Democratic influence in Congress might lead to a reconsideration of the Trump administration’s approach to the Iran conflict, potentially easing tensions.
The market movements were also reflected in specific sectors. Healthcare companies and discount retailers posted strong gains due to anticipated policy changes related to healthcare funding and assistance programs. HCA Healthcare shares increased by 10.9%, while Dollar Tree saw an 8.7% rise. Renewable energy companies benefited similarly, with First Solar up 4.7% and Enphase Energy advancing by 4.3%.
Conversely, defence contractors and major oil companies faced declines. Lockheed Martin’s shares fell 6.7%, Northrop Grumman’s by 4%, and ExxonMobil’s by 4.9% amid falling crude prices. Technology stocks had mixed results as investors weighed the possibility of stricter regulations on artificial intelligence and data center investments, resulting in Nvidia shares dropping 2% and CoreWeave falling 9.6%. Tesla’s shares decreased by 2.6%, and Trump Media and Technology Group experienced a significant decline of 23.5%.
Meanwhile, US Treasury yields fell as the drop in oil prices mitigated inflation concerns, with the yield on the 10-year Treasury declining to 4.88% from 4.95%.
European and Asian markets also showed mixed performances. Stock markets rose in Paris, Shanghai, and London, whereas Japan’s Nikkei 225 recorded a 1.4% decline.