Global Markets Surge After US Midterm Elections

Traders welcomed the clarity. Rachel Winter confirmed, "The market is experiencing a sizeable post-election bump, thanks to the removal of the pre-election uncertainty and the fact that Donald Trump has not contested the result."

Kathleen Brooks added, "Gridlock might be bad for politics, but it is good for markets, and traditionally US indices experience a strong rally after midterm elections." Raphael Olszyna-Marzys noted the outcome "adds clarity to the outlook and also removes some of the risk premium that a disputed result would have placed on asset prices."

Michael McLean projects Democrats could ultimately win 258 seats in the House, a gain of 43. This would mark the largest House majority for a party since at least 2009. In the Senate, Democrats are on track to gain seven to nine seats, with victories in Alaska and Mississippi potentially pushing them to 56 seats, their largest majority since 2010.

Despite the broad market rally, Asian shares and US futures showed mixed results on Wednesday. Japan’s Nikkei 225 dipped 1.4% to 62,188.63, and Australia’s S&P/ASX 200 fell 0.6% to 8,834.50.

Conversely, Hong Kong’s Hang Seng advanced 1.1% to 23,791.61, and the Shanghai Composite index gained 2.2% to 3,686.17. Chipmakers Nvidia and Broadcom were the strongest forces pushing the S&P 500 upward, with DuPont rallying 8.6% and Celanese climbing 5%.

However, shares in Tesla were down by around 3% on Wednesday, and CoreWeave plunged by around 9%. Rachel Winter highlighted a potential problem for companies like CoreWeave, Oracle, SpaceX, and Tesla, stating, "Several polls have indicated that Democratic voters are more likely to oppose data centres, and new Democratic senators have been elected following campaigns that focused on greater restrictions on data centre construction."

Meanwhile, Eurozone consumer price inflation accelerated to 4.0% year-on-year in October. Energy prices jumped 21% from a year earlier. Brent oil traded at 99 dollars a barrel on Wednesday, and gold quoted at 4,041.83 dollars an ounce.

The euro rose to 1.1222 dollars from 1.1197 dollars late Tuesday. Against the yen, the dollar remained flat at 158.45 yen. The yield on the US 10-year Treasury quoted at 4.92% late on Wednesday afternoon.

In corporate news, Marks & Spencer reported a sharp rise in half-year pre-tax profit to £355.1 million from £3.4 million a year earlier. Stuart Machin stated, "We fell short of our full potential," adding, "Put simply, we need to turn more of the demand we already have into profitable sales at a lower cost to serve."