NEW YORK (Reuters) – Most major stock markets rose on Wednesday after the U.S. midterm election divided control of Congress, while expectations of political gridlock in Washington weighed on the dollar.
U.S. oil prices slipped after U.S. crude output hit another record high.
While gridlock could hamper President Donald Trump’s political and economic agenda, few analysts expect a reversal of tax cuts and financial deregulation measures that have already been enacted.
That view helped all three Wall Street equity indices rally, with traders piling into technology and healthcare stocks. [.N]
“I think it is more just relief that the election has come and gone, no surprises, no tail-risk outcome occurred. Gridlock is fine, let’s get on with things and worry about the fundamental issues like earnings, the (Federal Reserve),” said David Joy, chief market strategist at Ameriprise Financial in Boston.
Still, a split Congress could hamper Trump’s push for a further round of tax cuts and deregulation, measures that have supercharged the U.S. economy, stock markets and the dollar.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., November 1, 2018. REUTERS/Brendan McDermid
The Dow Jones Industrial Average .DJI rose 423.38 points, or 1.65 percent, to 26,058.39, the S&P 500 .SPX gained 43.11 points, or 1.56 percent, to 2,798.56 and the Nasdaq Composite .IXIC added 152.67 points, or 2.07 percent, to 7,528.63.
The pan-European STOXX 600 index rose 1.06 percent and MSCI’s gauge of stocks across the globe .MIWD00000PUS gained 0.43 percent.
The U.S. Federal Reserve starts its two-day monetary policy meeting on Wednesday, and it is expected to keep interest rates unchanged. A rate hike in December is largely priced in.
“The policy path implied by this outcome shifts the narrative away from rising rates at least temporarily,” Morgan Stanley’s Michael Zezas wrote