What moved
US stocks rallied, and the rotation was more striking than the rise. The Dow ended up 3.03% at 53,356.12 and the S&P 500 rose 1.58% to 7,688.62, leaving it 1.99% below its 52-week high. The Nasdaq gained 1.44% to 25,736.51 and still sits 7.16% below its own.
Europe closed firmly higher: DAX +2.22%, CAC 40 +1.96%, FTSE 100 +1.79%. Asia, first to trade the election news, split. Taiwan finished at 42,948.91 and the Kospi at 5,683.80, down 7.37% and 4.28% respectively over five sessions, and the Nikkei ended lower at 62,188.63. The Hang Seng ended higher at 23,919.50, and the Shanghai Composite also rose, to 3,686.17.
Why
This morning's fear was that a Democratic sweep would punish the AI trade, and overnight it did: Asian chip and AI names sold off as traders unwound bets on deregulation and rapid data-centre expansion. That explanation survived only in narrower form. US technology finished flat, with Nvidia and data-centre builders weaker on worries about new construction limits. The wider market took the result as clean: Democrats won both chambers, President Trump said he would accept the outcome, and analysts framed it as gridlock. The Dow's lead looks like that rotation at work, since it is less exposed to AI than the Nasdaq, though no single factor fully explains the gap.
Oil did the rest. Brent is trading at $95.02, down 8.28%, and WTI at $88.47, after Vice-President Vance blamed the Iran war for Republican losses. Traders are pricing a change of direction, not a signed agreement, which makes this the most reversible part of the day. Cheaper oil eases inflation fears, and that matters when two Fed officials wanted a rate rise at the 28 October meeting. The 10-year Treasury yield ended 5.8 basis points lower at 4.894%, which supports stock valuations.
Mainland China followed its own logic: Beijing's market support and a rebound from a deep chip sell-off, which several Chinese fund houses called a recovery in sentiment rather than a confirmed turn.
Sentiment & risk appetite
Fear drained quickly: the VIX ended down 20.26% at 16.61, and the MOVE index of bond volatility has fallen 6.09% to 93.88. Participation was broad, with 3,994 advancers against 2,034 decliners across PrimerIQ's US universe, and seven of the eleven sector funds rose at least 2.49%, led by consumer discretionary at 4.26%. The exceptions carry the message: energy lost 4.74%, industrials 1.09%, and technology went nowhere after falling 6.49% over five days. Gold is up 3.31% at $4,071, but it pays no interest, so with yields lower and the dollar index down 0.34% this looks more like a rates and currency move than a flight to safety.
Economic calendar
Both of today's main US releases have printed. ADP showed private employers added 86,000 jobs in October, against an estimate of 75,000. At 10:00 EST the ISM services index came in at 54.5, below the 54.8 forecast and September's 54.9. New orders slowed to 55.9 from 59.8, while employment improved to 51.4 from 50.1. The prices index eased to 73.0 from 74.0 but remains high, and ISM warned of more pricing pressure if oil and tariff costs are not mitigated. Neither release moved markets as much as the politics did.
The next tests come later in the week. Jobless claims are due on Thursday at 08:30 EST, with 197,000 forecast. October payrolls follow on Friday at 08:30 EST, with 63,000 expected after September's 29,000.
Earnings
After-hours reactions are split: AppLovin jumped on revenue up 55% to $2.18 billion, while Qualcomm slipped on light profit guidance and higher capital spending, Arm eased despite revenue up 27% to $1.44 billion, and MercadoLibre fell after missing on adjusted earnings of $8.83 a share. In the regular session, outlooks and strategy outweighed the quarter: CVS earned $2.09 a share against $1.65 expected yet lost 12.53% on its plan to split in two, and FIS dropped 23.67% after cutting its 2026 outlook. McDonald's, at $3.57 against $3.38 expected, was rewarded.