US Stock Market Live Updates: US stocks rally after Democrats win Congress; data center stocks slide
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Business News›Markets›US Stocks›Wall St Guide›US Stock Market Live Updates: Dow Jones soars 1,000 points at open as Democrats win Congress; data center stocks slide
Dow Jones | Nasdaq | Stock Market Live: US stocks open higher as investors assess the impact of Democrats' midterm sweep on Washington's policy outlook. The Dow, S&P 500 and Nasdaq gain at the opening bell, while data centre stocks decline amid concerns over tighter AI regulation.
Wall Street opens higher as investors bet that a divided Washington following Democrats' midterm sweep could limit major policy shifts. However, data centre-related stocks come under pressure amid concerns over tighter AI regulation.
1 New Update
- Conor Cooper, macro strategist and squawker
Bitcoin initially tumbled as much as 2.8% over fears that a Democratic election sweep could derail crypto-friendly legislation and trigger stricter regulatory oversight for digital asset firms, though prices quickly rebounded to erase the losses.
US stocks opened higher on Wednesday as investors bet a divided Washington after the Democrats' midterm sweep could limit sharp policy shifts, though data center-related stocks were under pressure as concerns over tighter AI regulation weighed.
Read more: Wall Street opens higher as data centre stocks slide
Valuation expert Aswath Damodaran trimmed his valuation estimate for AI giant Anthropic to $1.45 trillion, from his earlier estimate of $1.475 trillion which was already lower than the industry estimates of $2 trillion.
Read more: Aswath Damodaran cuts Anthropic IPO valuation
U.S. private sector hiring eased to 86,000 jobs in October, down from 90,000 the previous month, but still surpassed market expectations according to the latest ADP report. Service-sector hiring led the gains, driven by trade, transportation, utilities, and hospitality, while employers used bonuses, overtime, and higher base pay to attract job seekers.
The steady job growth suggests the labor market remains stable as overall earnings growth hit its fastest pace since early 2024. The strong numbers provide the Federal Reserve leeway to focus on inflation ahead of official government employment data, following its decision to keep interest rates steady last month.
The U.S. trade deficit contracted by 0.7% to $105 billion in September, coming in slightly below economic forecasts despite resilient domestic demand driving overall imports to a record $426.6 billion. Both consumer spending and investments in artificial intelligence continued to fuel import volumes, which grew 1.2% alongside a 1.9% gain in total exports.
Despite the modest narrowing, the persistent trade shortfall highlights the ongoing drag from foreign goods on overall domestic growth. Net imports subtracted over 2.6 percentage points from third-quarter gross domestic product, marking four consecutive quarters where trade has failed to contribute to broader U.S. economic expansion.
A sweeping Democratic win in US midterm elections is the latest curve ball to markets grappling with the repercussions of the Iran war and an AI boom that has bolstered growth and inflation, just as the world's biggest economy's debt load mounts.
Read more: Democratic win adds to market worries over Iran and AI
A Democratic sweep of the US Congress jolted global markets, pulling down Asian tech stocks and the dollar while boosting Treasuries as investors braced for tougher scrutiny of President Donald Trump’s policies.
Read more: Democrats' win shakes Trump trades from AI to crypto
Investors also monitored the implications of the election results for the US fiscal outlook. Political gridlock could make it harder for lawmakers to agree on new spending measures, adding uncertainty to government finances. Yields on long-dated US Treasuries moved lower as bond prices rose. Meanwhile, Uber, McDonald's and CVS Health were among the prominent companies scheduled to report results before Wednesday's market opening.
AMD jumped 6.2% after forecasting faster-than-expected growth in 2027, supported by rising data centre sales and its growing challenge to Nvidia. Other chipmakers also traded higher, with Nvidia gaining 0.5%, Micron Technology rising 0.1% and Broadcom adding 0.2%. However, the broader AI trade remained under pressure as investors questioned whether Big Tech's massive investments would generate adequate returns.
The election outcome brought AI regulation into focus after Democrats made gains in key data centre states, where opposition to the industry's rapid expansion had been growing. Investors worried that tighter oversight could affect AI infrastructure investments and the broader economic outlook. Data centre companies IREN, Hut 8 and Applied Digital declined in premarket trading, while neocloud firms Nebius and CoreWeave also fell.
US President Donald Trump accepted the election results and acknowledged that the war in Iran had contributed to Republican losses. His response helped ease concerns about prolonged political confrontation and legislative gridlock. Daniela Hathorn, senior market analyst at Capital.com, said significant policy disagreements remained likely because Trump retained veto powers. Investors continued assessing the potential implications of divided government for US markets.
US stock futures rebounded on Wednesday after reversing sharp early losses as investors assessed the implications of Democrats' sweeping midterm victories. Democrats took control of both the Senate and House, marking a major political shift in Washington. Nasdaq-100 futures had fallen as much as 2.4%, while S&P 500 futures had dropped 1.4% following the results. However, markets recovered as investors reassessed the political outlook.