Divided Government Bets Drive Market Rally as Oil Prices Plunge

The Dow jumped 3.03% to 53,356.12, marking its strongest performance since April 2025, while the S&P 500 and Nasdaq Composite followed suit with gains of 1.58% and 1.44%, respectively. Investors interpreted the congressional seat shifts as a guarantee of stalemate between the White House and Democratic lawmakers, effectively cooling fears of aggressive new market oversight. This sentiment was bolstered by a retreat in Treasury yields, with the 10-year note dropping to 4.891% as oil futures fell to $88.12 a barrel.

While the broader market surged, the artificial intelligence sector faced renewed scrutiny. Despite gains elsewhere, data-center developers and cloud companies struggled with regulatory anxiety. CoreWeave shares tumbled 9.9%, and Hut 8 fell 23% following a $277.4 million quarterly loss. Datadog shares also slid 14% after reporting reduced usage from a major AI client. Conversely, consumer-facing firms thrived on the prospect of lower fuel costs. Amazon rose 6.1% and Lowe's climbed 7.5%, as traders anticipated a boost in holiday spending power. Jefferies strategists noted that while Democratic governors may implement guardrails for data centers, such measures are likely to focus on community engagement rather than blocking infrastructure growth entirely.