Written by: Trend Research

The Democratic Party secured both the House and Senate, bringing an end to electoral uncertainty, with the Dow surging by 1569.40 points, marking the largest single-day gain since April 2025.

Oil prices dropped over 8% in a single day, and Apple and Microsoft reached historic highs; however, AI infrastructure stocks like Nvidia and CoreWeave weakened due to concerns over data center regulations.

After hours, AppLovin's guidance exceeded expectations, surging about 21%, while Qualcomm's guidance was weak, dropping about 7%.

The Dow Rises 3%, Returning Above 53,000 Points

On Wednesday, the Dow rose by 1569.40 points, an increase of 3.03%, closing at 53356.12 points, returning above 53,000 points for the first time since September 8.

The S&P 500 rose 1.58%, closing at 7688.62 points; the Nasdaq rose 1.44%, closing at 25736.51 points.

Market participants believe that the legislative stalemate caused by the divided government is historically beneficial for the stock market. Trump also expressed a willingness to accept the election results and cooperate with the Democrats.

Funds Shift from AI Infrastructure to Large Tech and Defense Sectors

Apple briefly rose about 6%, hitting a historic high of 354.33 dollars, with a market capitalization exceeding 5.12 trillion dollars. Microsoft also reached a historic high.

The market logic is that a slowdown in data center construction may help alleviate the pricing pressures on storage chips, with Apple viewed as a beneficiary.

During the session, Amazon briefly rose about 7%, while Alphabet rose about 5%. The Communication Services ETF (XLC) briefly rose nearly 4%, and the Consumer Staples ETF (XLP) reached a historic high.

Bank of America rose about 4%, and Walmart rose about 3%.

On the other hand, Nvidia fell about 3%. CoreWeave dropped over 7% during the session, Nebius fell over 4%, and the Neocloud ETF (NCLD) briefly fell about 6%.

The five-year CDS spread for CoreWeave rose to 1139.7 basis points, and the yield on its 2031 maturity bonds rose to 15.919%.

New energy and healthcare stocks strengthened. First Solar rose 8.5% in pre-market, and HCA Healthcare rose about 7%. Trump's media technology group fell about 11% in pre-market.

AppLovin Soars After Hours, Qualcomm's Guidance Weak

AppLovin's Q3 revenue was 2.18 billion dollars, a 55% year-on-year increase, exceeding the expected 2.08 billion dollars; earnings per share were 4.30 dollars, surpassing the expected 4.04 dollars.

The company expects Q4 revenue of 2.37 to 2.4 billion dollars, above the market expectation of 2.25 billion dollars, and plans to increase its share repurchase authorization by 3.2 billion dollars. The stock price surged about 21% after hours to 328.05 dollars.

Qualcomm's fiscal Q4 adjusted earnings per share were 2.17 dollars, and revenue was 10.44 billion dollars, both slightly above expectations.

However, the company's guidance for next quarter's earnings per share is 2.15 to 2.35 dollars, with the midpoint below the expected 2.27 dollars. Revenue from mobile chips fell 26% year-on-year to 5.14 billion dollars, with rising storage prices suppressing mobile demand.

Qualcomm expects data center revenue to reach 5 billion dollars by fiscal year 2027, while automotive business revenue is expected to grow 89% year-on-year to 1.99 billion dollars. The stock price fell about 7% after hours to 160.98 dollars.

Arm's fiscal Q2 revenue was 1.44 billion dollars, with earnings per share of 0.52 dollars, both exceeding expectations, but the guidance for the next quarter was just slightly above expectations, leading to a drop of nearly 4% after hours.

Coherent's performance and guidance exceeded expectations, rising about 5% after hours. Zillow fell about 15% after hours, while Cava dropped about 13%.

The Democratic Party Sweeps Congress, Texas Governor Changes

The Democratic Party won a majority in both the House and Senate in the midterm elections and secured victories in key gubernatorial races, including Texas.

Texas's new governor, Gina Hinojosa, has promised to immediately suspend data center construction in the state. According to estimates from Wells Fargo, Texas accounts for about 27% of the country's data center capacity (in gigawatts).

Compass Point analysts expect Elizabeth Warren to likely become the chair of the Senate Banking Committee, and cryptocurrency legislation such as the Clarity Act may be postponed as a result.

Oil Prices Plunge, U.S. Treasury Yields Decline

WTI crude oil futures fell over 8%, settling at 88.12 dollars per barrel. Brent crude fell about 8%, near 95 dollars per barrel.

Vice President JD Vance attributed the Republican defeat to the Iranian War, and the market bets that pressures to end the war will increase.

U.S. Treasury yields declined. The 10-year yield dropped by 8.8 basis points to 4.886%, while the 2-year yield fell by 5.6 basis points to 4.58%. The U.S. dollar index weakened.

Spot gold rose about 2.9% in early European trading to 4043 dollars per ounce. Bitcoin briefly fell to around 75,000 dollars but then rebounded to around 80,000 dollars.

In data, October's ADP private sector jobs added 86,000, exceeding the expected 75,000. The October ISM services PMI decreased to 54.5, slightly below the expected 54.8; the price paid index was at 73.0, remaining at a high level.

Today's Focus

The following times are in Beijing time.

Stock Index Futures: As of 08:00 today Beijing time, S&P 500 futures were flat, while Nasdaq 100 futures fell 0.16%.

21:30: U.S. initial unemployment claims. The Challenger layoff report will also be released today.

This Evening Before the Market Opens: ConocoPhillips, Tapestry, and Kimberly-Clark will release earnings reports.

Friday Morning (After U.S. Market Closes): Airbnb and Akamai will release earnings reports.

Friday 21:30: U.S. October non-farm payroll report. The market expects the Federal Reserve to raise interest rates again in December.