US stocks finished sharply higher on Wednesday, with the S&P 500 up 1.6%, the Dow surging 1,569 points to a two-month high, and the Nasdaq advancing 0.9%. Democratic gains in Congress, combined with strong opposition to the war in Iran, deepened this week’s slide in oil prices, helping to fuel a post-election rally in both stocks and bonds. Expectations that increased political gridlock will curb further fiscal expansion and ease pressure on bond markets also underpinned equity gains.
Credit-sensitive sectors led the advance. Financial stocks were strong, with JPMorgan rising 4.2% and Berkshire Hathaway up 3.9%. Major technology names also climbed, despite mounting borrowing needs tied to heavy AI-related investment. Microsoft jumped 6.7%, Alphabet added 3.2% and Meta gained 1.4%, with Microsoft further supported by robust quarterly earnings reported last week. By contrast, chipmakers retreated as the Democratic victory heightened expectations of stricter regulatory oversight of the AI industry.
