US open: Stocks surge as investors bet on Washington gridlock after midterms

4th Nov 2026 14:46

(Sharecast News) - Major indices were sharply higher early on Wednesday after Americans overwhelmingly rejected Donald Trump's Republican party in the US midterm elections.

As of 1515 GMT, the Dow Jones Industrial Average was up 2.06% at 52,854.65, while the S&P 500 advanced 1.76% to 7,702.28 and the Nasdaq Composite came out of the gate 2.42% firmer at 25,986.84.

The Dow opened 1,067.93 points higher on Wednesday, setting it on a course for one of its best days of the year and more than reversing losses recorded in the previous session after the blue-chip index was dragged into the red by Apple after the tech giant issued a weaker-than-expected margin outlook and disappointing quarterly iPad sales.

Wednesday's primary focus looked set to be news that, in a contest dominated by the spiralling cost of living - in large part attributable to the US president's decision to go to war with Iran - a Democratic landslide had ended Republican control of both chambers, with majorities secured in the House of Representatives and Senate. Democrats also scored victories in key gubernatorial races, including Texas.

Trump appeared to accept the result, even telling Fox News that the Democrats "did a good job". But he also posted on social media: "I wasn't on the Ballot and if I was, we would have won IN A LANDSLIDE!", as well as a picture of a red baseball cap with the word "Veto" on it. The president had already warned he would block legislation in the event of the Republicans losing control of the Senate, stating: "After a couple of months of vetoes, they'll call and they'll say, 'how do we get this stuff done?'. And we'll work together. I have the power to veto."

Investors had headed into the US midterm elections concerned that a strong Democratic showing could weigh on parts of the market, particularly companies linked to the artificial intelligence buildout, amid fears of tighter regulation and potential restrictions on data centre development. However, hopes that the election result could lead to legislative gridlock, which has historically been viewed positively by markets, helped lift risk appetite.

AMD traded higher after the chipmaker delivered quarterly earnings and revenues comfortably ahead of expectations, while solar stocks also rallied as renewable energy and healthcare names were in favour on expectations of a policy shift in Washington, while AI-focused cloud infrastructure firms, defence contractors and prison operators came under pressure.

McDonald's reported third-quarter revenue of $7.16bn, up 1% year-on-year, while net income increased 9% to $2.49bn and diluted earnings per share rose 10% to $3.51, ahead of expectations. The fast-food giant also delivered a 1.5% increase in global comparable sales, with US same-store sales down 0.2%, a smaller decline than analysts had feared.

Meanwhile, Uber posted a 10% increase in third-quarter revenues to $14.76bn, slightly ahead of forecasts, as gross bookings grew 20% to $59.81bn and trips rose 16% to 4.06bn. Net income fell 92% to $512m, however, reflecting a $476m loss related to the revaluation of equity investments, while diluted earnings per share declined to $0.25 from a year earlier.

Arm Holdings will report earnings after the close.

On the macro front, US mortgage applications fell 1.2% in the week ended 30 October, according to the Mortgage Bankers Association of America, following a 3.4% rise in the prior week. Applications to purchase a home fell 2% week-on-week, while applications to refinance a mortgage ticked up just 0.1% The fall comes despite a modest easing in borrowing costs, with the average rate on 30-year fixed mortgages decreasing to 7.3% from 7.37% - its lowest level since September.

Elsewhere, US private sector employment increased by 86,000 in October, according to ADP, exceeding expectations for a 69,000 gain and matching September's upwardly revised reading. Hiring remained resilient for a second consecutive month, with job creation spread across businesses of all sizes. Mid-sized firms led the way with 33,000 new jobs, followed by small businesses with 28,000 and large companies with 24,000. The services sector accounted for the bulk of employment growth, with trade, transportation and utilities adding 39,000 jobs, while education and health services and leisure and hospitality added 28,000 and 19,000, respectively. However, professional and business services shed 27,000 jobs for a third straight month.

On another note, the US trade deficit narrowed in September as exports and imports both climbed to fresh highs, with a surge in capital goods shipments helping offset stronger demand for foreign products. According to the Bureau of Economic Analysis, the goods and services trade deficit fell to $105.1bn in September, down from $105.7bn in August, with the improvement reflecting a $700m decline in the goods deficit to $135.9bn, while the services surplus edged down by less than $100m to $30.9bn.

Exports rose by $5.8bn on the month to a record $321.5bn, while imports increased $5.2bn to $426.6bn. Goods exports climbed $5.1bn to $211.0bn, led by a $3.8bn increase in capital goods, including gains in computers, computer accessories and civilian aircraft, while services exports increased by $700m to $110.5bn, supported by higher travel spending and intellectual property-related receipts. On the import side, goods imports rose $4.4bn to $346.9bn, with capital goods imports jumping $11.6bn, boosted by strong growth in computers and accessories, while consumer goods imports increased $2.4bn as pharmaceutical purchases climbed. These gains were partly offset by lower imports of industrial supplies, including crude oil and non-monetary gold.

Finally, US services sector growth remained solid in October, according to both S&P Global and the Institute for Supply Management, although rising costs and growing uncertainty continued to weigh on business confidence. S&P Global's services PMI eased to 56.1 from 58.8 in September, while the ISM's services PMI edged down to 54.5 from 54.9. However, both readings remained comfortably above the 50-point mark that signals expansion.

The ISM survey also pointed to continued growth in demand, with its new orders index registering 55.9, although that was down from September's 59.8. S&P's composite PMI, which combines manufacturing and services activity, slowed to 55.9 from 58.4, indicating private-sector growth moderated but remained robust.

Reporting by Iain Gilbert at Sharecast.com

Dow Jones - Risers

Microsoft Corp. (MSFT) $553.10 8.39%

3M Co. (MMM) $191.36 8.18%

Apple Inc. (AAPL) $351.72 7.06%

McDonald's Corp. (MCD) $276.08 4.60%

Home Depot Inc. (HD) $347.19 3.75%

Nike Inc. (NKE) $40.21 3.52%

Walt Disney Co. (DIS) $118.68 3.48%

Salesforce.Com Inc. (CRM) $230.85 3.27%

JP Morgan Chase & Co. (JPM) $344.55 2.81%

Procter & Gamble Co. (PG) $166.24 2.72%

Dow Jones - Fallers

Intel Corp. (INTC) $59.17 -5.27%

Caterpillar Inc. (CAT) $595.97 -4.48%

Chevron Corp. (CVX) $219.37 -2.87%

Unitedhealth Group Inc. (UNH) $398.88 -1.25%

Dow Chemical Co. (DOW) $33.53 -0.98%

Coca-Cola Co. (KO) $94.84 -0.01%

Verizon Communications Inc. (VZ) $45.81 1.14%

S&P 500 - Risers

Stanley Black & Decker Inc. (SWK) $117.60 13.21%

Zimmer Biomet Holdings Inc (ZBH) $109.44 13.16%

Booking Holdings Inc. (BKNG) $169.28 10.11%

Sba Communications Corp. (SBAC) $197.97 9.93%

Arista Networks Inc. (ANET) $187.01 9.48%

Amazon.Com Inc. (AMZN) $270.36 9.12%

Jack Henry & Associates Inc. (JKHY) $173.28 8.90%

Intuitive Surgical Inc. (ISRG) $474.87 8.73%

DENTSPLY Sirona Inc. (XRAY) $10.64 8.68%

Microsoft Corp. (MSFT) $553.10 8.39%

S&P 500 - Fallers

Fidelity National Information Services Inc. (FIS) $30.32 -21.74%

Unum Group (UNM) $75.49 -17.38%

Quanta Services Inc. (PWR) $590.03 -10.50%

CVS Health Corp (CVS) $81.82 -9.86%

Skyworks Solutions Inc. (SWKS) $78.41 -9.31%

Coterra Energy Inc. (CTRA) $32.56 -8.62%

NRG Energy Inc. (NRG) $88.57 -8.02%

Seagate Technology Plc (STX) $575.92 -7.60%

Apache Corp. (APA) $45.16 -7.22%

Eaton Corporation plc (ETN) $365.79 -6.57%

Nasdaq 100 - Risers

Booking Holdings Inc. (BKNG) $169.28 10.11%

Amazon.Com Inc. (AMZN) $270.36 9.12%

Intuitive Surgical Inc. (ISRG) $474.87 8.73%

DENTSPLY Sirona Inc. (XRAY) $10.64 8.68%

Microsoft Corp. (MSFT) $553.10 8.39%

Sirius XM Holdings Inc (SIRI) $32.35 7.76%

Expedia Group Inc. (EXPE) $314.19 7.47%

Apple Inc. (AAPL) $351.72 7.06%

Workday, Inc. (WDAY) $205.60 6.82%

Autodesk Inc. (ADSK) $266.50 5.96%

Nasdaq 100 - Fallers

Qvc Group Inc Series A (QVCGA) $0.34 -13.49%

Skyworks Solutions Inc. (SWKS) $78.41 -9.31%

Seagate Technology Plc (STX) $575.92 -7.60%

Intel Corp. (INTC) $59.17 -5.27%

Western Digital Corp. (WDC) $337.58 -4.78%

Tesla Inc (TSLA) $382.59 -4.67%

Micron Technology Inc. (MU) $837.03 -3.84%

Asml Holdings N.V. (ASML) $1,519.26 -3.48%

Analog Devices Inc. (ADI) $420.09 -2.61%

Applied Materials Inc. (AMAT) $379.26 -2.43%