Tech up post election; defense shares, energy down
SPY•All three major U.S. stock indexes rose more than 1% early Wednesday after Democrats swept Tuesday’s midterm vote, while defense, energy and data center stocks fell. The S&P 500 technology sector gained 1.7%, and U.S. oil prices were down about 3%.
1. Stocks rise after vote
All three major U.S. stock indexes rose more than 1% early Wednesday after Democrats’ sweep in Tuesday’s midterm vote eased near-term uncertainty over the election results. The STOXX 600 was up about 2%, while gold and bitcoin surged, the dollar dipped and the 10-year U.S. Treasury yield fell to 4.92%.
2. Sector moves diverge
The S&P 500 technology sector rose 1.7%, and Advanced Micro Devices shares gained after the company’s quarterly report. Meta Platforms shares also rose, while data center builders and operators, including Applied Digital, fell; Applied Digital was down 4.8%. Energy stocks declined with oil prices, and defense shares, including Northrop Grumman, were lower.
3. Investors weigh risks
Rick Meckler of Cherry Lane Investments said investors may be relieved that the vote was not close, but cautioned that the rally could be short-lived amid possible AI-related legislation and greater regulation. He said investors were also watching how the vote could affect the U.S. war with Iran, which has driven up energy prices and concerns about inflation and interest rate hikes.
