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The Democratic Party won a significant majority in the midterm elections, and Trump accepted the results. US stocks rose sharply in early trading, but AI and semiconductor stocks weakened on policy concerns.
US stocks There was a boom in early trading on the 4th.democratic party After winning a decisive victory in the midterm elections, President Trump also accepted the election results, ending the risk of uncertainty hanging over Wall Street.Dow Jones The industrial index rose 1,035 points or 2% in early trading on the 4th; The S&P 500 and Nasdaq indexes rose 1.1%; The Philadelphia Semiconductor Index fell 2%; TSMC ADRs fell 1%.
The Democratic Party won more than half the seats in the Senate and House of Representatives, and also won gubernatorial elections in key states such as Texas. The party will now work to curb Trump’s policies, including tax cuts for businesses as well as tariffs that have fueled inflation and a war with Iran.
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, said the stock market surge “is partly due to the President’s initial attitude and reaction to the election results. Although uncertainty still exists, it is certain that there will be a standoff, and judging from historical experience, this will be good for the market.”
Bullishly related stocks that could benefit from the stable environment led early gains. Walmart rose 1.8% and Bank of America (BofA) rose 2.9% as investors sought shares other than technology stocks.
Stocks that could directly benefit from Democratic policies or the end of Trump’s harsh measures also rose. Shares of Molina Healthcare, Centene, HCA Healthcare and other medical insurance and hospital companies saw a rise of 5% to 7%.
The Democratic victory also put selling pressure on some stocks, especially those related to artificial intelligence (AI). Investors are worried that a Democratic victory could mean more restrictions on the construction of data centers across the United States. Texas Governor-elect Gina Hinojosa promised to immediately stop construction of the local data center.
Oracle and CoreWeave both fell in early trading, and Texas-based Musk’s SpaceX also fell 5%.
Another reason for the market to be bullish in early trade is that historical data suggests that the market will perform better when the government and opposition parties are divided, as less policy and regulatory interference will be beneficial for corporate prospects.
Summary FAQ
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Because after the election results became clear, the market’s uncertainty about the direction of Trump’s policies reduced. Wall Street believed that separation of the government and opposition parties would help reduce policy and regulatory interference, which is generally more beneficial for corporate profits and stock market performance.
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Cycling stocks, financial stocks and some medical insurance and hospital companies performed strongly. Walmart, Bank of America, Molina Healthcare, Centene and HCA Healthcare all had notable increases, indicating funds are turning to stable beneficiary targets.
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The market is worried that if the Democratic Party wins the election, there may be more restrictions on data center construction and related investments. Therefore, AI concept stocks like Oracle and CoreWeave are under pressure. The semiconductor group also weakened together, and the Philadelphia Semiconductor Index fell.
