US stocks rally as Democrats win midterms, AI shares fall

U.S. equities jumped at the opening bell on Wednesday following the Democratic sweep of the House and Senate. The Dow Jones Industrial Average rose 1,166.66 points, or 2.25%, to 52,953.38, the S&P 500 gained 91.73 points, or 1.21%, to 7,660.65, and the Nasdaq Composite added 284.66 points, or 1.12%, to 25,656.67.

President Donald Trump told The New York Times he would accept the election outcome and indicated to The Wall Street Journal that Republicans would work with Democrats. Market strategist Jay Woods of Freedom Capital Markets said the president’s response helped lift sentiment, adding that “still more uncertainty looms, but one thing is certain, there will be gridlock and historically this is good for the market.”

Shares of companies tied to the broader economy led the rally, with Walmart up about 2% and Bank of America advancing 1.9%. Healthcare firms also posted gains, including UnitedHealth (+1.4%), Molina Healthcare (+6.3%) and Centene (+4.7%). The Invesco Solar ETF rose 5% on expectations of favorable policy effects.

In contrast, stocks linked to artificial-intelligence faced selling pressure as investors weighed the prospect of tighter rules on new data-centre projects, especially in Texas. Democratic gubernatorial candidate Gina Hinojosa, who won the Texas race, has pledged a moratorium on data-centre development, prompting declines in Oracle and CoreWeave shares and pressure on Elon Musk’s SpaceX, which is based in the state.

Analysts noted that divided government can limit sweeping policy shifts, which historically supports market stability. Andrew Slimmon of Morgan Stanley Investment Management said markets “like gridlock, they don’t like a party with too much power.” He also suggested the election result could help ease Middle-East tensions, potentially lowering oil prices. West Texas Intermediate crude futures fell about 1% on the day, adding to the equities’ positive backdrop.