Australian market rises as Wall Street rallies and oil prices fall after US midterm results

The S&P/ASX 200 opened up 160.5 points, or about 1.8%, to 8,995, led by gains in technology shares and a decline in energy stocks after oil prices fell 8% to under US$95 per barrel. The move followed a strong performance on Wall Street, where the S&P 500 rose 1.6%, the Dow Jones Industrial Average gained 3%, and the Nasdaq climbed 1.4% after the Democratic sweep of the US House and Senate.

Banking shares were mixed; National Australia Bank fell 6% after reporting a 9% drop in annual profit, while Commonwealth Bank edged slightly higher. Mining companies advanced, with Rio Tinto up 4.4%, BHP 4%, and Fortescue 3.4%. Gold miners rose as the metal crossed US$4,000 an ounce.

Tech stocks showed divergent moves. NextDC surged 43% after announcing an aftermarket share acquisition by an investment vehicle linked to Goodman Group and Digital Realty, which the company described as “opportunistic.” WiseTech and Xero also posted gains, while drone-components maker Codan slipped 2.6% amid hopes for a de-escalation in the Middle East.

Energy firms declined, with Woodside down 5.5%, Santos 4.5% and Ampol 1.3%, reflecting the oil price drop. On the US side, Trump Media & Technology Group lost 24.5%, Tesla fell 3.3% and SpaceX slipped 3.8% after the election outcome.

Analysts noted that market moves are driven more by corporate earnings and interest-rate expectations than by political outcomes. “Earnings trump elections,” said Brian Jacobsen, chief economic strategist at Annex Wealth Management.

The shift in US political control also impacted sectors tied to defense and AI. Shares of Lockheed Martin, Northrop Grumman and General Dynamics fell 6.9%, 4.5% and 2.6% respectively, while AI-related stocks such as Nvidia and CoreWeave dropped 3.1% and 9.9%. Companies with larger AI-chip expenditures, like Alphabet, rose 3.2%.

Renewable-energy firms gained on expectations of supportive policy, with First Solar up 4.6% and Enphase Energy climbing 3.7%. Healthcare stocks rose, highlighted by a 10.3% increase in HCA Healthcare, and retailers such as Dollar Tree gained 9.6% on hopes for consumer-friendly measures.

In bond markets, the 10-year Treasury yield slipped to 4.88% from 4.95% as lower oil prices eased inflation concerns. Global indices mostly rose, with gains in Paris, Shanghai and London, while Japan’s Nikkei 225 fell 1.4%.

"Earnings trump elections," Brian Jacobsen, chief economic strategist at Annex Wealth Management.

"Trump is not now a lame duck, but an angry duck," Carsten Brzeski, global chief of macro at ING Bank.

"An optimistic view is that Trump becomes a tame duck...," Brzeski added.