The shift in the balance of power in the USA is causing a cheering atmosphere on large parts of the stock market. The most important indices are increasing strongly. Entire industries are breathing a sigh of relief. Late in the day, US Vice President Vance is still pushing down the price of oil. But there are also losers.
The Democrats' landslide victory in the US midterm elections has given European stock markets wings. Banks and green energy stocks in particular benefited from hopes of more industry-friendly policies in Washington. The leading index DAX rose by 2.2 percent to 26,437 points. At its peak, the leading index was only 78 points short of the new record.
The EuroStoxx50 rose by two percent. Outside the eurozone, the Zurich SMI and the London FTSE 100 also rose significantly. US stock exchanges were up 2.9 percent higher in early trading. âThe changed political balance of power could make American budget policy more disciplined and thus defuse at least some of the concerns about escalating national debt and long-term high bond yields,â summarized Andreas Lipkow, chief market analyst at CMC Markets. The chances of a year-end rally for the Dax have now increased significantly.
A significant fall in oil prices also provided tailwind for the stock markets. The North Sea Brent variety fell by 4.5 percent per barrel to $98.83. The Democratic majority in Congress could further increase the likelihood of an early peace agreement in the Middle East, said Dennis Kissler from US financial services provider BOK Financial. Sustainably falling energy prices would not only reduce inflationary pressure, but also improve the profit prospects of many companies, said Lipkow. At the same time, they could give central banks more leeway in monetary policy. When US Vice President JD Vance blamed the actions in Iran for the election outcome early in the evening, the price decline accelerated significantly to more than eight percent.
The banking index was the biggest sector winner in Europe with an increase of 4.6 percent. "With Congress now in Democratic hands, the U.S. government's ability to impose requirements or sanctions on European banks in the U.S. is limited," said Michael Field, equity strategist at Morningstar. Shares from renewable energy providers were also in high demand. Investors are betting that Democrats will expand support for green energy projects after winning the majority in both chambers of Congress.
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Strong business figures also ensured a good mood. In Frankfurt, Heidelberg Materials shares jumped 9.5 percent and were at the top of the DAX. Continental shares gained 5.2 percent. In Copenhagen, the stocks of the Danish pharmaceutical company Novo Nordisk rose by 5.6 percent. The manufacturer of the weight loss drug Wegovy earned more than expected in the third quarter thanks to continued high demand for the drug and raised its annual targets.
The dollar index fell 0.6 percent to 101.26 points, marking its lowest level in more than a month. The euro appreciated by 0.7 percent to 1.1272 dollars. Stock marketers expected stricter regulation in the AI ââsector after the US elections. This is likely to dampen companies' willingness to invest, which in turn could cloud the growth prospects of the US economy. Among precious metals, gold rose in price by 3.5 percent per troy ounce and cost $4,065. In addition to the oil sector, losers were papers from the tech sector and suppliers: Infineon lost 4.1 percent, ASML 3.4 and STMicro 5.1 percent. Siemens Energy and ABB, which equip AI data centers, fell 8 and 2.8 percent.
Investors are now waiting for the US labor market report due on Friday for further information on the US Federal Reserve's course. Traders currently see a probability of almost 80 percent for the Fed to raise interest rates in December.
