FX.co ★ Victory for Democrats supports broad US stock market but splits tech sector

The US stock market rose after reports that the Democratic Party won the congressional elections and the Republican Party led by President Donald Trump failed. According to media sources, the Democrats secured majorities in both the House of Representatives and the Senate.

The Dow Jones Industrial Average climbed 3.03%, and the Nasdaq Composite grew 1.44%. The tech sector’s reaction was mixed. Microsoft’s market capitalization increased by 6.7%, Alphabet’s - by 3.2%. At the same time, SpaceX and Tesla, both linked to the Republicans’ key backer Elon Musk, lost 3.8% and 3.3% of market value, respectively.

Experts say Democrats may push for tougher regulation of artificial intelligence. Expectations around AI development already look overheated for the market, so potential regulatory changes add another source of uncertainty for tech companies.

Oil prices extended their fall for a second day straight. Brent was trading at $94.35 per barrel when the election outcome was unveiled, after having peaked at $110. Against this backdrop, Chevron shares plunged 3.7% and Exxon Mobil shares slumped 4.6%. Thus, the broad-market rally was accompanied by a notable divergence in performance between technology, oil, and certain companies tied to the political outcome of the election.