NEW YORK (Reuters) – U.S. stocks surged on Wednesday with broad gains led by the technology and healthcare sectors as investors, relieved to put midterm elections behind them, made bets that a divided Congress would be good for equities.
Democrats won control of the House of Representatives on Tuesday, while President Donald Trump’s Republican party expanded its Senate majority, pointing to a political gridlock in Washington.
The S&P’s biggest boosts came from the S&P technology sector, which rose 2.4 percent, and the healthcare index, which gained 2.8 percent as investors were more comfortable taking on risky bets. The consumer discretionary sector was also a strong gainer as Amazon.com soared.
“I don’t think any of Trump’s agenda that he’s already accomplished gets unwound. That was the main point of concern for investors,” said Robert Phipps, a director at Per Stirling Capital Management in Austin, Texas. “We’ve got a relief rally because the market got exactly what it expected.”
At 2:53PM ET, the Dow Jones Industrial Average rose 444.78 points, or 1.74 percent, to 26,079.79, the S&P 500 gained 47.9 points, or 1.74 percent, to 2,803.35 and the Nasdaq Composite added 162.37 points, or 2.2 percent, to 7,538.34.
While a divided Congress will make it harder for Trump’s administration to push through new legislation such as additional tax cuts, investors were not expecting a reversal of tax cuts and deregulation measures that have already been enacted.
Some strategists said Democratic control of the House means President Donald Trump would have a harder time gaining support for efforts to impose more regulations on Amazon.com, which rose 6 percent providing the S&P 500’s biggest boost from a single stock.
But even as technology and healthcare stocks soared, investors questioned whether the sectors could now be more at risk of additional regulatory scrutiny.