Markets
The Dow Jumped 1,569 Points on a Vote for Gridlock
The Dow rose 3.03% to 53,356.12 on Wednesday, its best day since April 2025, after Democrats won both chambers of Congress. Apple closed at a record.
Overnight, the election looked like a problem for stocks. By the close on Wednesday, November 4, it looked like the best news in months. The Dow Jones Industrial Average rose 1,569.40 points, or 3.03%, to 53,356.12, its best day since April 9, 2025 and its first close above 53,000 since September 8. The S&P 500 gained 1.58% to 7,688.62, the Nasdaq Composite 1.44% to 25,736.51 and the Russell 2000 1.58% to 2,856.95, a few hours after Nasdaq-100 futures had been down as much as 2.2% on the first projections of a Democratic Congress.
The turn came from two directions. President Trump said he was "absolutely willing" to accept the results, which removed the risk of a contested outcome, and investors fell back on the pattern that split control in Washington tends to limit policy surprises. "Markets like gridlock — they don't like a party with too much power," said Andrew Slimmon of Morgan Stanley Investment Management. David Kelly, chief global strategist at JPMorgan Asset Management, expects "moderation in growth, moderation in inflation, less uncertainty."
The leaders were not the stocks that had led for most of the year. Apple rose 5.3% to a record close of $349.51 after touching $354.33 during the day, which took its market value above $5.1 trillion, according to CNBC. Microsoft gained 6.7% to $555.80 and Amazon 6.1% to $266.03, while Nvidia fell 3.2% to $200.13 and CoreWeave lost 9.5%, Reuters reported. Investors were sorting the AI trade by who already owns the data centres: Needham's Laura Martin wrote that "Hyperscalers are AI incumbents", which tighter local rules would protect rather than hurt. The Consumer Staples Select Sector SPDR fund rose 3.4% to a record high.
Energy went the other way. Brent crude fell 8.7% as traders bet that a Democratic Congress will press for an end to the Iran war, and the Energy Select Sector SPDR fund dropped 4.7%, with Exxon Mobil down 4.6% and Chevron 3.7%. Economic data barely registered: ADP said private employers added 86,000 jobs in October, against a Dow Jones estimate of 75,000, and the ISM services index slipped to 54.5. The 10-year Treasury yield ended near 4.89%, about 6 basis points lower on the day.
The size of the Dow's move owes something to its construction. It is weighted by share price, not market value, so a $35 gain in Microsoft or an $18 gain in Apple counts for far more than the same percentage move in a lower-priced member, and Wednesday's rally was concentrated in exactly those expensive shares. The next tests come quickly. The Bank of England decides on rates at noon London time on Thursday, with a hike to 4% widely expected, and Friday's October jobs report will show whether the economy that investors now expect Congress to leave alone is still adding jobs.