Trump accepted the outcome and expressed willingness to work with Democrats alongside fellow Republicans. Jay Woods, chief market strategist at Freedom Capital Markets, attributed part of the rebound to the president’s initial tone and response.
The congressional shift follows Trump’s business-friendly tax cuts, tariffs and a war in Iran that has pushed inflation higher. Investors welcomed reduced political uncertainty and the prospect of divided government.
US stock market rally lifts healthcare and solar shares
Healthcare companies, solar shares and stocks linked to a more stable economy recorded some of the strongest gains. The advance also spread across the major indexes: the S&P 500 rose 1.7%, while the Nasdaq Composite gained 2.1%.
Walmart added 1.3% and Bank of America climbed 2.6% as investors sought opportunities outside technology. Both were among the early leaders in shares tied to the economy that could benefit from a steadier environment.
Health insurers and hospital operators advanced as investors bought companies that could benefit from Democratic policies or an easing of tougher Trump actions. Molina Healthcare and Centene each rose 6%, while HCA Healthcare gained 7%.
The Invesco Solar ETF jumped 9%, adding to the sector gains accompanying the broader US stock market rally.
Texas result weighs on target=”_blank” rel=”noopener noreferrer external”>artificial intelligence build-out. Hinojosa’s victory added to those concerns Wednesday.
SpaceX, which is headquartered in Texas, declined alongside CoreWeave even as the broader market advanced.
Strategists point to gridlock as oil falls
Strategists at Freedom Capital Markets and Morgan Stanley Investment Management linked the positive market response to the prospect of political gridlock. Their interpretation was that divided government limits policy changes that can disrupt the business outlook.
Woods said gridlock has historically benefited the market. Andrew Slimmon of Morgan Stanley Investment Management said markets “like gridlock — they don’t like a party with too much power.”
Slimmon also said that a stronger push toward resolving the Middle East conflict following the election could lower oil prices. He linked elevated oil prices to inflation, the Federal Reserve’s challenges and higher interest rates.
WTI crude oil prices fell 3% on Wednesday.
Article produced with the assistance of artificial intelligence and reviewed by the editorial team.
