Stocks rose Wednesday after the 2018 midterm elections shifted the balance of power in Washington, with Wall Street preparing for the possibility of legislative obstacles within a divided Congress.
The Dow Jones Industrial Average jumped 1%, or more than 350 points, and the Nasdaq Composite rose 2%. The S&P 500 was up 1.52%.
“In other words, certainty ruled the day,” Paul Eitelman, a strategist at Russell Investments, said.
“Had the unlikelier scenario of a Democratic takeover of both the House and the Senate won out, we think markets likely would have moved in more significant fashion in the days ahead.”
Shares of medical companies jumped, with the S&P 500 healthcare index up 1.9%. A repeal of the Affordable Care Act or other measures that could reduce medical costs were unlikely following the results. DaVita surged nearly 13% after California rejected a cap on dialysis revenue.
Cannabis stocks rallied after Michigan legalized recreational weed use, marking the first Midwestern state to do so. Utah and Missouri, meanwhile, passed legislation making marijuana legal for medical purposes. Tilray shares were up 7% and Aphria shares gained 5%.
Oil companies in Colorado rose after voters rejected a ballot measure that would have limited drilling and fracking in the state, particularly within the prolific Denver-Julesburg Basin. Shares of Anadarko Petroleum and Noble Energy both jumped more than 7%.
With fewer near-term expansionary fiscal measures likely, according to analysts, the dollar fell against a basket of currencies. Treasury yields slipped, with the 10-year down 1.5 basis points, to 3.2%.
Meanwhile, the Federal Reserve is expected to keep monetary policy steady at a meeting Thursday. The central bank increased its benchmark interest rate by 25 basis points, to 2.25%, in