US stocks rose strongly in Wednesday's trading, as investors tried to identify the companies and sectors that benefited from and were affected by the significant losses suffered by the Republican Party in the midterm elections, and the changes that the results may impose on the economic and trade policies of the administration of President Donald Trump.
The Standard & Poor's 500 Index jumped 1.1 percent in early trading, heading towards recording its best daily performance in six weeks, while the Dow Jones Industrial Average rose 983 points, and the Nasdaq Composite Index rose 1.7 percent. In the bond market, US Treasury bond yields declined.
The performance of stocks varies according to the implications of the electoral results for companies. Shares of First Solar, which operates in the field of solar energy, jumped, while companies linked to Trump ally Elon Musk were under pressure, with SpaceX shares falling by 5.8 percent to their lowest levels since August, and Tesla shares falling by 5.1 percent in early trading.
The shares of “Trump Media”, the parent company of the US President’s social media platform, also fell by 11 percent, recording its largest decline since August 10, in a reflection of the varying reaction of investors towards companies linked to the US administration and its allies.
The gains came after the elections produced a Democratic majority in both chambers of Congress, in a result that paves the way for a new phase of legislative resistance to Trump's program, which he has sought to implement intensively since his return to the White House.
Investors believe that the division of control over Washington between the Republican and Democratic parties may not be a negative thing for the markets, as it reduces the possibility of passing broad policy changes that may confuse the economy or affect the performance of companies.
Stephen Brown of Capital Economics said that the size of the gains achieved by the Democrats does not change much of the expectations related to policies in the near term, because the party still lacks a majority in the Senate capable of overcoming the legislative obstruction, while Trump retains the power to veto laws.
However, the implications of the results remain mixed across sectors. Some Asian markets fell briefly amid concerns that the rise of Democrats will slow the expansion of artificial intelligence projects, due to tightening safety considerations and local community resistance to the establishment of data centers. This comes at a time when investors are wondering whether the significant rises recorded in shares of artificial intelligence companies reflect a sustainable boom or bubble in the sector.
In futures trading before the opening of Wall Street, Dow Jones contracts rose by 1.4 percent, and Standard & Poor's 500 contracts rose by 1 percent, while Nasdaq contracts compensated for part of its previous losses related to artificial intelligence stocks, rising by 0.54 percent.
On the other hand, shares of wind energy companies rose, while shares of defense industries companies came under pressure, amid expectations that political developments will reduce the intensity of the war with Iran, which may limit the expected demand for defense products and services.
The political and economic picture is still open to multiple possibilities, as Trump retains broad executive powers in key files, including defense, foreign policy, and some aspects of trade.
Saudi stocks continued their gains until the close of trading on Wednesday, after opening the session with an increase in conjunction with the rise of Gulf markets, following the Democrats’ victory in the majority of the US Senate and House of Representatives, in a result that investors are awaiting its repercussions on the directions of the US administration and the course of geopolitical tensions in the region.
The main market index, TASI, closed up by 1.7 percent at 10,039 points, adding 163 points, to record the highest closing in two weeks, amid trades with a total value of about 4.5 billion riyals ($1.2 billion).
The session witnessed an increase for most stocks, as “Al Rajhi Bank” shares rose by 2.2 percent, “Al Ahli Saudi” shares rose by 2.7 percent, while “Saudi Aramco” shares rose by 0.3 percent.
The shares of “Gas Holding”, “Amar”, “Naseej”, “CGS”, and “Malath Insurance” topped the list of rising companies, with percentages reaching or close to 10 percent.
Shares of “Flynas”, “Retal”, “Al Khareef”, and “Avalon Pharma” also rose by rates ranging between 3 and 4 percent.
On the other hand, Yanbu Cement shares declined by 4 percent to 12.90 riyals, after the company announced losses during the third quarter of 2026, contrary to average market expectations that indicated achieving a net profit exceeding 25 million riyals.
