MSX US Stock Daily Watch: Midterm Elections Reshape Market Trading, Healthcare and Clean Energy Lead Gains, Defense and Oil Sectors Under Pressure
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Today's Watch
On the first trading day after the US midterm elections, US stocks did not fall because Washington re-entered divided government; instead, they rose across the board.
The Democratic Party won control of both the Senate and the House in this midterm election, ending the situation in which Republicans controlled both the White House and Congress. Since Trump remains president, the United States will enter a divided government phase of "Democratic Congress, Republican White House" starting in early 2027.
On November 4, the Dow Jones Industrial Average rose 3.03%, up 1,569 points in a single day; the S&P 500 rose 1.58%, the Nasdaq rose 1.44%, and the Russell 2000 rose about 1.6%. What the market traded first was the removal of election uncertainty and the possibility that divided government could limit large-scale fiscal and policy changes.
However, index gains do not mean all sectors benefit. Healthcare services, clean energy, and some rate-sensitive assets were the first-day winners; oil, defense, and companies highly associated with Trump and Musk came under clear pressure.
Therefore, the first day after the midterm elections was not simply "Democrats win, US stocks rise," but rather the market recalibrating the policy direction for different sectors based on the next two years' budget, healthcare, energy, war, and regulatory direction.
Data in a Minute
The Democratic Party gained control of the Senate and the House, and the United States re-entered divided government;
The Dow Jones Industrial Average rose 3.03%, closing at 53,356.12 points, up 1,569.40 points in a single day;
The S&P 500 rose 1.58%, closing at 7,688.62 points;
The Nasdaq rose 1.44%, closing at 25,736.51 points;
The Russell 2000 rose about 1.6%, with small-cap stocks rebounding in tandem;
The 10-year US Treasury yield fell about 6.6 basis points to 4.88%, as the market expects divided government may limit fiscal spending;
Brent crude fell about 8.7%, closing at $94.62 per barrel;
HCA Healthcare rose 10.3%, becoming a representative winner in the healthcare services sector;
First Solar rose 4.6% and Enphase Energy rose 3.7%, as the clean energy sector gained support from policy expectations;
Exxon Mobil fell 4.6% and ConocoPhillips fell 5.2%, as oil stocks fell in line with oil prices;
Lockheed Martin fell 6.9%, Northrop Grumman fell 4.5%, and General Dynamics fell 2.6%;
Trump Media fell 24.5%, becoming one of the most visibly declining politically linked assets of the day;
Tesla fell 3.3%, and SpaceX fell 3.8%;
AMD rose about 1% after announcing a relatively strong growth outlook, indicating that the AI sector did not see a uniform decline.
MSX View
The market reaction this time can be divided into three main threads. The first is healthcare services. Democrats have already put restoring Affordable Care Act subsidies and reducing or delaying the previously passed Medicaid spending cuts on the policy agenda after regaining control of Congress. Hospital operators are especially dependent on commercial insurance, Medicare, and Medicaid payments, so the market first raised the revenue visibility of related companies.
HCA Healthcare rose 10.3% in a single day, reflecting investors' expectation that hospitals may face less Medicaid reimbursement pressure in the future. However, this is still only a policy expectation. Trump continues to control the White House, and if Democrats truly want to reverse existing healthcare cuts, they will still have to face the presidential veto, budget negotiations, and intra-party differences.
The second is clean energy. First Solar and Enphase rose, reflecting the market's view that after Democrats control Congress, clean energy tax credits, federal grants, and project approvals may receive more protection. Congress can also use budgets, hearings, and oversight powers to limit administrative adjustments to some new energy policies. The third is oil, defense, and politically linked assets. Brent crude fell nearly 9% in a single day, becoming the direct reason for the decline in energy stocks. The market believes that Democratic control of Congress may strengthen oversight of the Iran war and increase the possibility of pushing for ceasefire negotiations. The logic for defense stocks is similar. After Democrats control Congress, they can influence military spending and war policy through budget approvals, hearings, and investigations, but diplomatic and military decisions remain mainly led by the president and the executive branch. Therefore, the declines in Lockheed Martin and Northrop Grumman look more like style adjustments.
The declines in Trump Media, Tesla, and SpaceX reflect the market reassessing political relationships and regulatory risks. A Democratic Congress has investigation, subpoena, and hearing powers and may strengthen scrutiny of Trump's business interests, government contracts, and Musk's companies. But these companies' orders, revenue, and product competitiveness have not changed immediately because of one election, and subsequent performance will still return to their respective fundamentals.
The AI supply chain also needs to be viewed differently. Democratic control of Congress may increase scrutiny of data center power use, construction permits, antitrust, AI safety, and platform responsibility, so data center projects with high capital expenditure and strong policy dependence therefore face higher uncertainty. But the Nasdaq still rose 1.44% that day, and AMD also rose driven by its earnings outlook, indicating that the market has not denied AI demand, but is re-distinguishing between companies whose profits have already materialized and those mainly relying on long-term expectations.
From the overall market perspective, the short-term benefits of this election mainly come from lower uncertainty, falling US Treasury yields, and lower oil prices, rather than Congress being able to immediately introduce new economic policies. Divided government may limit extreme policy changes and reduce the probability of large-scale fiscal expansion; but it may also increase the risk of budget deadlock, government shutdowns, and debt ceiling negotiations. For US stocks, the environment over the next two years may be one of fewer policy changes but more political bargaining.
What is worth watching next is whether Democrats can form executable policies on healthcare budgets, clean energy funding, defense spending, and AI regulation, while also paying attention to whether oil prices and US Treasury yields maintain their post-election trajectory.
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Risk Warning: Macroeconomic and US stock market volatility is severe. The content of this article is for academic and research observation reference by the Maitong Research Institute only and does not constitute any investment advice.
