Financial markets had a clear reaction once Tuesday's election results became known: investors who had been bracing for uncertainty bought stocks.
The Dow Jones Industrial Average closed Wednesday at 53,356, up 3.03 percent, which traders described as its best single-day performance since April 2025. The S&P 500 rose 1.58 percent to 7,688.62, and the Nasdaq Composite gained 1.44 percent to 25,736.51. The rally was broad, touching nearly every sector except energy, and Apple shares climbed to an all-time high, pushing the company's market value above $5 trillion, while Microsoft shares surged roughly 6 percent.
Commodity markets moved just as sharply. Crude oil fell more than 8 percent, with U.S. benchmark West Texas Intermediate dropping to around $88 a barrel and global benchmark Brent easing toward the $94 to $95 range, as traders cited hopes for progress on a diplomatic resolution involving Iran alongside the clearing of U.S. political uncertainty. Gold, often treated as a safe haven in uncertain times, nonetheless pushed above $4,100 an ounce.
The rally carried overseas. In Hong Kong, the Hang Seng index jumped more than 3 percent, and Australia's ASX 200 rose about 2.6 percent. In India, the Sensex surged more than 1,600 points and the Nifty climbed above 24,350, with traders there pointing to both the easing of U.S. political uncertainty and the drop in oil prices, which benefits oil-importing economies like India. Reaction in other Asian markets was more mixed, with Japan's Nikkei 225 and South Korea's Kospi both pulling back on separate concerns about semiconductor and technology valuations.
Weekly jobless claims are due Thursday, with October payroll figures scheduled for release Friday, both of which will give investors a clearer read on the economy heading into the holiday season.
Why did stocks rally after the midterm elections?
Investors had been pricing in uncertainty ahead of the vote, and markets typically rally when a major source of uncertainty is resolved, regardless of the outcome.
Why did oil prices fall so much?
Traders pointed to hopes for diplomatic progress involving Iran as well as the broader easing of political uncertainty in the United States.