Dow Jumps 1,569 Points the Day After the Election as Oil and Energy Stocks Fall on Hopes for an End to the Iran War

Investors bet divided government means less uncertainty; the energy sector fell 4.8% and defense stocks slid. Exit polls found about four in 10 voters named the economy their top issue.

Wall Street rallied on Wednesday as investors digested the Democratic sweep of Congress. The Dow Jones Industrial Average rose 1,569.40 points, or 3%, to close at 53,356.12, Reuters reported. The S&P 500 gained 1.6% to 7,688.62 and the Nasdaq Composite rose 1.4% to 25,736.51.

"Stocks are sharply higher today as election clarity reduces uncertainty," Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, told Reuters. He said the gridlock that divided government can bring is often favorable for stock prices.

Winners and losers

The consumer discretionary sector rose 4.3%. Microsoft gained 6.7% and Amazon 6.1%. The energy sector fell 4.8% as investors bet the shift in power would hasten the end of the war with Iran, which has kept oil prices elevated for months, according to Reuters. Defense stocks were also lower, with investors expecting President Trump's $1.5 trillion defense budget request to face a tougher road in Congress; Fortune reported Lockheed Martin and L3Harris lost about 4% in morning trading. A solar-energy fund rose nearly 6% on expectations that federal clean-energy support will stay in place.

Companies tied to the artificial-intelligence buildout fell. The Philadelphia semiconductor index dropped 3.1% to a six-month low, and several data-center operators fell by double digits. "It's pretty clear that the AI trade will face some headwinds there," said Scott Chronert of Citi Research. Fortune reported Trump Media fell 11.7%.

What voters said about the economy

About four in 10 voters named the economy as the most important issue facing the country, according to exit-poll data summarized by Fortune, and Democratic and Republican House candidates split those voters roughly evenly. Voters who named immigration backed Republicans overwhelmingly, at 89%, while about eight in 10 voters who named democracy as their top issue backed Democrats. Going into the election, inflation stood at 3.7% and gas averaged more than $4 a gallon, as we reported in our Oct. 31 edition.

Why it matters

A one-day market move is not a forecast, and family budgets are not set on Wall Street. What matters to most households is whether prices at the pump and the grocery store come down. Both parties now share responsibility for that: the new Congress controls spending and taxes, and the president controls foreign policy, including the war that has driven energy prices. The test of the next two years will be whether they can work together on costs, as both have promised.

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