US stocks rally as Democrats win Congress despite AI stock slide
Wall Street rose on Wednesday as investors bet a divided Washington could limit policy shifts following the Democratic midterm sweep.
US stocks rose on Wednesday as investors reacted to the Democratic Party seizing control of both the Senate and the House of Representatives, according to Business Standard. The midterm sweep in Republican strongholds followed a broad voter backlash against President Donald Trump, who noted that the US-Israeli war on Iran contributed to his party's loss.
While the prospect of fewer legislative changes lifted some large technology stocks, companies tied to artificial intelligence (AI) infrastructure faced pressure. Concerns regarding tighter AI regulation and the pace of data centre buildouts weighed on the sector. Data centre operators including IREN, Hut 8, Applied Digital, and Core Scientific saw shares fall between 1.2 per cent and 13 per cent.
At 9:46 a.m. ET, the Dow Jones Industrial Average rose 1,203.07 points, or 2.30 per cent, to 52,989.79. The S&P 500 gained 129.88 points, or 1.72 per cent, to 7,698.80, while the Nasdaq Composite increased by 540.38 points, or 2.13 per cent, to 25,912.39.
Among the gainers, Amazon.com jumped 7.1 per cent, Alphabet gained 3.4 per cent, and Meta Platforms added 1.6 per cent. Conversely, Tesla and SpaceX fell by 3.9 per cent and 1.9 per cent, respectively. Solar and clean energy companies moved higher, with the Invesco Solar ETF climbing 8.3 per cent.
Scott Chornert, head of US equity strategy at Citi Research, said the general view is that the election uncertainty is now behind investors. However, he noted that if the pace of data centre buildouts changes, it could alter the fundamental trajectory for many suppliers.