DAX and SMI hit records after Democrats win US midterms, oil falls

Swiss index passes 15,000 points

The Swiss Market Index (SMI) rose above 15,000 points for the first time on Wednesday, 4 November, around 16.40 in the afternoon. At the close it stood at 15,022.85 points, up 1.9%, after touching an intraday all-time high of 15,044. The broader SPI gained 1.7% to 21,158 points, and 18 of the 20 SMI stocks finished higher. Logitech led the index with a gain of 8.7% at the close after Apple's shares also rose sharply that day, while Alcon rose 5.8% and UBS 4.6%. UBS shares were lifted by a Bloomberg report on a new compromise proposal in the dispute over equity capital rules, and speculation that Morgan Stanley could buy the bank resurfaced.

DAX back at its record level

The DAX rose 2.2% on Wednesday and closed at 26,438 points, extending a rally that began during the day. On Thursday, 5 November, it climbed as much as 0.7% to 26,626 points in early trading, breaking the record set at the end of August. Earlier that morning the index had been quoted at 26,646.32 points, up 0.8%, so figures from the first trading hour differ. Andreas Lipkow, chief market analyst at CMC Markets, argued that a more disciplined US budget could temper fears about heavy borrowing and high long-term yields.

“The changed balance of power could discipline American budget policy more strongly and thereby ease at least some of the concerns about runaway national debt and long-term high bond yields.”

Oil falls and banks lead the gains

Brent crude fell 4.5% to 98.83 dollars a barrel on Wednesday. The decline accelerated to more than 8% in the evening, after US Vice President JD Vance said the approach to Iran bore a decisive share of the blame for the election outcome. Lipkow added that lower energy prices would ease inflation pressure and give central banks more room to act. Dennis Kissler of BOK Financial said the Democratic majority in Congress could raise the chance of a near-term peace deal in the Middle East. The European banks index rose 4.6%, the largest sector gain in Europe. Michael Field, equity strategist at Morningstar, explained why banks gained ground.

“Because Congress is now in Democratic hands, the US government's options to impose conditions on European banks in the US or to sanction them are limited.”

DAX2.2%

SMI1.9%

European banks index4.6%

DAX

2.2 %

SMI

1.9 %

European banks index

4.6 %

Data from the article text

Tech stocks split and AI worries spread

Tech stocks reacted unevenly to the vote. Tesla fell sharply and chipmakers lost ground, while Alphabet and Microsoft gained strongly. The Nasdaq opened higher and kept rising, so the sharp correction some analysts had expected did not come. Investors also worried that Democrats could tighten rules on the AI sector, for example on building new data centres, and that concern weighed on Asian chipmakers. In Tokyo the Nikkei dropped 4.5% at one point before recovering. After the US opening bell the Dow Jones gained 2.2% and the Nasdaq 2.1%. Renewable-energy stocks rose on expectations that Democrats would expand support for clean power projects.

Caution before the next session

A market analyst cautioned that investors should not celebrate before the evening. He pointed to a mix of Middle East risks, inflation and interest-rate worries, and doubts about AI as reasons for restraint. On Thursday the tech-heavy Kospi in Asia was hit as traders said investors were reallocating money, which affected the technology sector.