Dow surges 1,500 points as Democrats take control of Congress
The Dow Jones Industrial Average surged 1,500 points on Wednesday, just hours after midterm election results showed Democrats had taken control of the U.S. House and Senate.
The S&P 500 climbed 1.8%, while the tech-heavy Nasdaq increased 2.1%. The Dow jumped 1,511 points, or 2.9%.
Oil prices, meanwhile, plunged on Wednesday after Vice President JD Vance issued a statement on X blaming the Republican defeats on the Iran war.
The West Texas Intermediate futures price, a benchmark index for U.S. trading, dropped 8%, registering at about $88 a barrel.
The national average price of a gallon of gas stands at $4.12, marking an increase of $1.14 since the outbreak of the Iran war in February, AAA data showed. Over the past month, the national average has dropped 24 cents a gallon.
"Unless something significant changes, we could be looking at the national average price of gasoline falling below $4/gal in the next week," GasBuddy analyst Patrick De Haan said in a social media post.
A blue wave on Tuesday catapulted Democratic Senate candidates to victories in Republican strongholds such as South Carolina and Texas. As of Wednesday morning, Democrats had won 54 seats in the Senate, with competitive races yet to be called in Alaska and Mississippi.
A strong performance in House contests, meanwhile, appeared to set Democrats on a path toward a comfortable majority in the lower chamber.
Jim Reid, a research strategist at Deutsche Bank, described the midterm results as in line with past examples of a party out of power running against an unpopular president.
"This looks like a perfectly normal election by historical standards. Markets appear to have welcomed that normality, with an emerging relief rally as things stand," Reid said in a memo to clients shared with ABC News.
Jeremy Richardson, a senior portfolio manager for Global Equities at RBC Global Asset Management, voiced similar sentiment about relief among investors.
"Midterm election results were consistent with market expectations and betting market predictions, mitigating the risk of significant short-term price dislocations," Richardson said in a statement to ABC News.
Despite the uptick in stocks, at least one analyst cautioned about the risk for the tech sector posed by newly empowered Democrats, many of whom ran campaigns critical of artificial intelligence data centers.
"The Democratic blue tidal wave across the Senate and House was a seismic shift that will have a negative impact on the pace of the AI Revolution buildout in the US over the next few years," Dan Ives of Yorkville said.
In recent years, stock gains have been propelled in part by a handful of tech giants known as the "Magnificent 7": Alphabet, Amazon, Apple, Meta, Microsoft, Tesla and Nvidia. Many of those firms have embraced AI.
"There is no way to sugarcoat that Democrats taking control, especially over the Senate, will create some major hurdles for AI and tech legislation," Ives added.
Investors, however, appeared to shrug off that concern -- at least with regard to some tech giants.
Microsoft, which holds a large stake in OpenAI, saw its stock price jump more than 6% in early trading. Amazon, which has spent hundreds of billions on its build out of AI infrastructure, also climbed more than 6%.
By contrast, shares fell for some large tech firms. Nvidia, the giant chipmaker fueling AI products, saw shares tick down about 2%.
