The results of the midterm elections in the United States, which confirmed the success of the Democrats and the defeat of President Donald Trump's Republicans, were greeted with cautious optimism by the markets the day after the midterms. After an initial phase of slippage, dictated above all by fears about the impacts on investments linked to artificial intelligence and defence, the price lists returned to positive territory almost everywhere: both stocks and bonds were pushed upwards, while the collapse in oil and natural gas prices worsened. With the Dems regaining control of Congress, markets have picked up on their opposition to the war in Iran and intent to rein in AI. Thus, in the aftermath of the midterm elections, on November 4th Wall Street closed the session with a rally and achieved one of its best performances in recent months.
On November 4, on Wall Street, the Dow Jones closed the session up by 3.03%, to 53,356.12 points: it achieved the highest daily increase since April 9, 2025, the day on which President Trump decided to suspend many of the so-called "liberation day" tariffs. The Nasdaq gained 1.44%, to 25,736.51 points, while the S&P 500 stood at 7,688.62 (+1.58%). "The stock market just hit another all-time high: 91 times in a very short time frame, less than two years. Your 401(k) pension plans are through the roof. Records across the board!", Trump wrote in Truth, celebrating Wall Street's positive performance in the aftermath of the Republican meltdown.
The victory of the Dems, experts explain, was well received on markets from Asia to Europe up to Wall Street. “Political friction could generate volatility, but history suggests that a divided government can support government bonds, corporate credit and stocks as policy clarity improves,” one analyst explained.
However, it was the sectors most "linked" to Trump that went down. In general, defense and banks and tech rallies are down. During yesterday's session, after a tweet from JD Vance who associated Trump's defeat with the decision to go to war with Iran, traders glimpsed a turning point in the direction of peace and Brent lost 10% close to 93 dollars a barrel, the lowest level in the last two months; natural gas lost more than 8% to 84.26 euros per megawatt hour. Furthermore, it has not escaped the markets' notice that many Dem candidates have spoken out about the slowdown in the development of AI and the mass construction of data centers. Thus, initially there was a "sell off" of semiconductor stocks on the markets. Then, as the hours passed, investors changed direction: according to analysts, the thought that has emerged is that fewer investments in AI mean positive cash flows for big tech companies: thus the index of large-cap technology stocks rose, together with Apple, Microsoft, Amazon. Down, however, are Elen Musk's giants such as Tesla and SpaceX.
Even in Europe, the markets reacted positively the day after the US mid-term elections: Madrid +3%, London (+1.79%), Frankfurt (+2.22%), Paris (+1.96%) and Milan (+2.18%) also rose sharply. The lists were supported by stocks in the banking (which benefits from the decline in bond yields), luxury and renewable energy sectors. On the contrary, defense sector stocks also slipped in Europe as expectations on military spending are reduced.
On the bond front, Treasury bond yields fell: the yield on 10-year US Treasury bonds fell six basis points to 4.90%, the yield on German bonds fell six basis points to 3.27%. the yield on British bonds fell by 13 basis points to 5.13% and the Italian one by 15 to 4.31%. Among currencies, the dollar suffered its steepest decline in two months, the euro rose 0.4% to $1.1237, the British pound rose 0.4% to $1.3472 and the Japanese yen rose 0.2% to 158.30 per dollar. Bitcoin surpassed $80,000 and Ether surpassed $2,427.
