
The Democratic Party won the midterm election and Trump accepted the results, eliminating political uncertainty on Wall Street
AI-generated summary
The results of the U.S. midterm elections were announced, and the market reacted to expectations of political deadlock. Investors are also concerned about possible policy restrictions faced by the construction of AI data centers.
The decisive victory of the U.S. Democratic Party in the midterm elections and President Trump's acceptance of the results have eliminated the risk of political uncertainty that has enveloped Wall Street. U.S. stocks opened sharply on the 4th, with the Dow Jones rising more than 1,000 points, or 2.1%, and the S&P 500 and Nasdaq rising 1.7% and 2.2% respectively. Philadelphia Semiconductor fell 0.8%, while TSMC ADR rose 0.2%.
Trump told the New York Times that he was "absolutely willing" to accept the election results and told the Wall Street Journal that he and Republicans would work with Democrats.
Jay Woods, chief market strategist at Freedom Capital Markets, pointed out that the rebound was "partly due to the president's initial rhetoric and response to the election results; although there is still more uncertainty, one thing is for sure, there will be gridlock, and historically, this has been good for the market."
Morgan Stanley's Andrew Slimmon said markets "like political gridlock, but they don't like parties with too much power."
He also said that if the election results prompt all parties to step up efforts to resolve conflicts in the Middle East, this could lower oil prices. He pointed out that "oil prices and inflation have been problems faced by the Federal Reserve (Fed) and are part of the reasons for higher interest rates." West Texas Intermediate crude oil fell 3% on the 4th.
The market is worried that AI construction will encounter resistance
Before the election, investors worried that a Democratic sweep could put pressure on parts of the market, especially stocks related to the construction of artificial intelligence (AI). Investors worry that a Democratic victory could mean more restrictions on data center construction. Democratic Texas gubernatorial candidate Gina Hinojosa won the election. During the campaign, she vowed to immediately suspend the construction of data centers, exacerbating market doubts about AI stocks.
CoreWeave's shares opened down more than 3% on Wednesday, while Musk's SpaceX, which is headquartered in Texas, fell 1.9%.
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