Wall Street jumps as Democrats secure control of Congress, AI-related stocks split
U.S. equities rose sharply after Democrats won majorities in both chambers, while data-center shares fell on concerns about tighter AI regulation.
Wall Street closed sharply higher on Nov. 4 as Democrats captured the Senate and House of Representatives, easing political uncertainty and boosting risk appetite. The gains were broad, with the S&P 500 up 1.6% to 7,688.62, the Nasdaq Composite rising 1.4% to 25,736.51 and the Dow Jones Industrial Average climbing 3% to 53,356.12.
"Stocks are sharply higher today as election clarity reduces uncertainty," said Terry Sandven, chief equity strategist at US Bank Wealth Management in Minneapolis. He added that the election could introduce a degree of gridlock that is sometimes favorable for equity prices.
AI-related stocks showed a split performance. Cash-rich AI leaders such as Microsoft (+6.7%), Amazon (+6.1%), Alphabet (+3.2%) and Meta Platforms (+1.4%) advanced, while chipmakers and data-center operators fell after Democrats made gains in states with significant data-center activity.
"It’s pretty clear that the AI trade will face some headwinds there… If you push out the pace or change the pace of the data-center buildout, you begin to change the fundamental trajectory for many of those suppliers," said Scott Chronert, head of US equity strategy at Citi Research. Data-center firms such as Hut 8, IREN, Core Scientific and Applied Digital posted declines of 23% to 6.7%.
The Philadelphia Semiconductor Index slipped to a six-month low, down 3.1%, while AMD rose 1% after forecasting faster-than-expected growth through 2027.
Energy stocks fell 4.8% and consumer-discretionary stocks rose 4.3%. The dollar weakened against most currencies and long-dated Treasury yields fell.
SpaceX and Tesla were among the laggards, each losing around 3% as investors noted Elon Musk’s recent political spending. Defence contractors such as Northrop Grumman, RTX and Lockheed Martin also slipped, reflecting uncertainty over the future of the administration’s $1.5 trillion defence budget request. Clean-energy shares gained, with the Invesco Solar ETF up nearly 6%.