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U.S. President Donald Trump signs a hard hat while talking with workers at the White House ballroom construction site in Washington, D.C., on Nov. 4, 2026. /AP

Wall Street cheered as American voters put the brakes on the Trump administration in the U.S. midterm elections. The election amounted to a rebuke of President Donald Trump, and the market showed a clear shift after Democrats took control of Congress, with the Dow surging 3.03%. With Democrats now controlling both the Senate and the House of Representatives, changes to the Trump administration's policies appear inevitable. In particular, international oil prices plunged more than 8% on expectations of an early end to the Iran war, reflecting a broader reassessment of risks across financial markets. Meanwhile, stocks in sectors sensitive to policy changes, including artificial intelligence (AI) infrastructure and defense, showed mixed performance.

The Dow Jones Industrial Average rose 1,569.40 points, or 3.03%, from the previous session to close at 53,356.12 on Wednesday at the New York Stock Exchange (NYSE). It was the biggest point gain in about 19 months, since April 9 last year. The Standard & Poor's 500 (S&P 500) gained 1.58% to finish at 7,688.62, while the Nasdaq Composite rose 1.44% to close at 25,736.51.

The rally reflected expectations that Democratic control of Congress would reduce political uncertainty. Investors appeared to believe that stronger congressional checks on the Trump administration's tariffs, fiscal spending and overseas military policies could reduce abrupt policy shifts and unexpected actions. Trump's stated willingness to accept the election results and cooperate with Democrats also helped improve investor sentiment.

Oil prices plunge on hopes of an end to Iran war

Another development drawing market attention was the outlook for the Iran war. With Democrats controlling Congress, some expected stronger scrutiny of the Trump administration's military operations to increase political pressure for an early end to the conflict. Hopes that prolonged disruptions to energy supplies could ease helped drive international oil prices lower.

December West Texas Intermediate (WTI) crude futures fell 8.29% from the previous session to settle at $88.12 per barrel on the New York Mercantile Exchange. January Brent crude futures also dropped 8.67% to $94.62 on London's ICE Futures exchange. The yield on the 10-year U.S. Treasury note also declined from 4.95% the previous day to as low as 4.88% during trading.

Falling oil prices are positive for stocks because they can ease inflationary pressures and corporate costs that have been driven higher by rising energy prices. Stable energy prices could reduce production and transportation costs for businesses and fuel expenses for households, while also easing inflationary pressures. Lower Treasury yields also helped ease tensions in financial markets.

However, a shift in congressional control does not automatically mean the war will end. The president retains his authority as commander in chief and his executive powers over foreign and security policy, meaning any actual changes in military policy will depend on the Trump administration's decisions and progress in negotiations with Iran.

AI and defense stocks see mixed fortunes

In the AI sector, shares of major technology companies and data center operators moved in opposite directions. With Democrats performing strongly in states such as Texas and Georgia, where data centers are concentrated, concerns grew that regulations on data center construction and electricity consumption could tighten. Data center operator Hut 8 plunged 23.2%, while IREN and Core Scientific fell 11.2% and 10.4%, respectively. Nvidia also declined 3.1%, and the Philadelphia Semiconductor Index dropped 3.1%.

In contrast, Microsoft rose 6.7%, Amazon gained 6.1% and Alphabet, Google's parent company, advanced 3.2%. The gains appeared to reflect expectations that a slowdown or adjustment in the pace of AI infrastructure investment could benefit major technology companies with established platforms and substantial financial resources over companies spending heavily on data center construction.

The defense industry was also affected by the election results. Lockheed Martin and Northrop Grumman fell 6.9% and 4.5%, respectively, amid expectations that the Trump administration's proposed $1.5 trillion defense budget could face difficulties due to congressional opposition from Democrats. Trump Media & Technology Group, founded by President Trump, plunged 24.5%.

The latest stock market movements suggest that changes in the U.S. political landscape could trigger broad shifts across global stock markets. They are expected to have a significant impact not only on financial markets but also on investment prospects across industries. However, how long the market's optimism will last remains uncertain. The Trump administration still retains powerful veto authority, and skepticism persists over whether Trump, given his personality, would readily forgo using it.

"Because the Trump administration itself has not changed, this is only a temporary period of market strength, and it is too early to be overly optimistic about the outlook," said a trader identified only as A, who has worked on Wall Street for many years. "If President Trump enters into an all-out confrontation with Democrats and domestic politics becomes unstable, the stock market could experience renewed volatility."

                                                                                                         Cheon Hyun-bin