World shares advance as Democrats’ victory eases political uncertainty
Supporters watch a screen projecting early results as they gather for an Election Night rally for US Senator Jon Ossoff (D-GA), Democratic candidate for re-election, during the US midterm elections in Atlanta, Georgia, US, November 3, 2026. REUTERS/Carlos Barria
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NEW YORK/LONDON, Nov 4 : Global stocks rallied on Wednesday after Democrats seized control of both chambers of Congress in the US midterm elections, providing greater political clarity and reducing uncertainty that has weighed on markets.
In a major setback to President Donald Trump, Democrats scored sweeping victories in Republican strongholds for the first time in generations. The breadth of the party’s success was underscored by gains in districts long considered safely conservative, highlighting a political shift that may have caught some investors off guard.
On Wall Street, all three main indexes finished higher as consumer discretionary, financials and real estate stocks drove gains. Energy shares were the biggest losers on the day, with crude prices down as Trump acknowledged that the Iran war had played a role in his party’s sweeping defeat.
The Dow Jones Industrial Average rose 3.03 per cent, the S&P 500 was up 1.58 per cent and the Nasdaq Composite gained 1.44 per cent.
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The MSCI All-World index was up 1.38 per cent, while Europe’s STOXX 600, which has acted as a hedge against AI-related risks, jumped 1.82 per cent to two-month highs.
“Markets hate uncertainty and even though a lot of what the result was had been priced in ahead of time, getting confirmation of that last night brings certainty to markets,” said Clayton Allison, portfolio manager at Prime Capital Financial. “Now this brings questions as to what actually gets done in Washington over the next two years. But the markets love to see that there is a resolution to a catalyst event.”
Opinion polls have shown Democratic voters favouring more control over AI, and investors expect the Democratic-controlled Congress to apply more scrutiny to the sector.
The AI boom has helped propel global markets in recent years, driven by heavy spending from tech giants racing to build data centers and expand computing capacity. That has made investors acutely sensitive to anything that could derail the technology’s rapid expansion.
Advanced Micro Devices rose 1 per cent after the US chipmaker forecast faster growth through 2027, reassuring investors that demand for AI infrastructure remains strong.
Brent crude oil futures fell nearly 9 per cent to settle at $94.62 a barrel as investors weighed Washington’s next move in talks to end the wars in Ukraine and Iran against worries that recent attacks in both conflicts could further disrupt supplies.
“Trump took us to war without any Congressional authority and this tells that we’re going to get the situation in Iran under control,” said Bill Strazzullo, chief market strategist at Bell Curve Trading. “The market is responding to the fact that we’re going to have at least some oversight.”
SAFE-HAVEN BID
Treasuries rallied as investors expect gridlock in Washington to cut government spending, with AI regulation also possibly slowing growth and reducing the need for rate hikes.
The yield on the benchmark US 10-year Treasury note was down 6.62 basis points on the day at 4.88 per cent.
The broadly weaker dollar left the euro up 0.34 per cent at $1.1231 and the pound 0.44 per cent higher at $1.347.
The yen and the Swiss franc — both safe-haven currencies — also notched gains. The Swiss franc was up 0.49 per cent against the dollar at 0.817 francs. The Japanese yen strengthened 0.16 per cent to 158.4.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro,fell 0.23 per cent.
In cryptocurrencies, bitcoin gained 3 per cent to $80,164.99. Ether rose 5.6 per cent to $2,421.84.
Spot gold rose 3.49 per cent to $4,065.80 an ounce.
Source: Reuters
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