Democrats' midterm win lifts Wall Street: Dow jumps 3.03% to 53,356 on 4 November

Democrats take Congress as Trump accepts the result

Democrats won majorities in both the House of Representatives and the Senate in the US midterm elections held on Tuesday, 3 November. They also prevailed in several contested governor races, including in Texas. The new balance of power is expected to act as a counterweight to Donald Trump's agenda, which has combined business-friendly tax cuts with tariffs and a war with Iran that has pushed up inflation. Trump told the New York Times that he was fully willing to accept the outcome, and told the Wall Street Journal that he and Republicans would work with Democrats.

Wall Street's strongest day since April 2025

The Dow Jones Industrial Average closed up 1,569.4 points, or 3.03%, at 53,356.12 on Wednesday, 4 November. The index moved back above 53,000 for the first time since 8 September and posted its best session since 9 April 2025, when Trump paused his so-called reciprocal tariffs for 90 days for at least some countries. The S&P 500 gained 1.58% to close at 7,688.62, and the Nasdaq Composite rose 1.44% to 25,736.51. Earlier in the session the Dow had been up 2.63% at 53,146, and the gain widened into the close. In intraday trading Walmart shares rose 3% and Bank of America shares 2.5%, as investors looked beyond technology. A gauge of the largest technology companies rose about 3% after recent pressure on the sector.

Dow Jones Industrial Average3.03%

S&P 5001.58%

Nasdaq Composite1.44%

Dow Jones Industrial Average

3.03 %

S&P 500

1.58 %

Nasdaq Composite

1.44 %

Data from the article text

Oil, gold and the dollar

Oil prices fell sharply after Vice President JD Vance attributed the Republicans' election losses on Tuesday to the war with Iran. US crude dropped more than 8%, and Brent futures traded down by more than 8%. Gold moved the other way. Spot gold rose 3% to $4,045 an ounce in morning trading, while spot silver climbed 4.3% to $52, platinum rose 3.4% to $1,464 and palladium gained 5.6% to $985.5. Gold futures for next month advanced 2.9% to $4,056, and gold later traded above $4,000 an ounce. The dollar index fell about 0.3% in the morning, and the yield on the US 10-year Treasury eased about 0.03 percentage points to 4.92%. Rona O'Connell of StoneX wrote in a note cited by CNBC that a Democratic sweep of both chambers would likely put pressure on interest rates and the dollar, supporting gold, while bringing fiscal power struggles and institutional friction.

Europe and investor views

European markets followed Wall Street higher, with Frankfurt closing up 2.22%, Milan 2.18%, Paris 1.96% and London 1.79%.

Frankfurt2.22%

Milan2.18%

Paris1.96%

London1.79%

Frankfurt

2.22 %

Milan

2.18 %

Paris

1.96 %

London

1.79 %

Data from the article text

Several investors read the political stalemate as supportive for stocks. Jason Pride of Glenmede said that political gridlock is positive for markets and that stocks have historically performed better when no party can pass legislation on its own votes. Ulrike Hoffmann-Burchardi of UBS said volatility in the AI sector may rise because of political developments, but that underlying demand remains strong and stronger congressional oversight does not necessarily derail the AI investment cycle. Brian Therien of Edward Jones said a Democratic-led Congress could bring tighter oversight to some sectors, and some investors see the Democratic gains as a complication for data centre development in certain states.