[Closing Bell] Wall Street Soars: Dow Jumps 3.03%, Democrats' Congressional Control Lifts All Three Indices

S&P 500 rose 1.58%, Nasdaq rose 1.44%... Investment sentiment improved due to political uncertainty easing, and the semiconductor index fell 3.13%... International oil prices plunge 8% amid concerns over AI data center regulation

The three major indices of the New York Stock Exchange rose simultaneously on the 4th (local time). This is because political uncertainty has eased as the Democratic Party takes control of both the Senate and House of Representatives in the midterm elections. While the Dow Jones Industrial Average soared more than 3%, stock prices by industry were mixed, with stocks related to artificial intelligence (AI) data centers and semiconductors falling due to concerns about strengthening regulations.

On this day, the Dow Jones Industrial Average ended trading at 53,356.12, up 1,569.40 points (3.03%) from the previous trading day. The Standard & Poor's (S&P) 500 index closed at 7,688.62, up 119.70 points (1.58%), and the Nasdaq composite index, centered on technology stocks, closed at 25,736.51, up 364.50 points (1.44%). The Philadelphia Semiconductor Index recorded 10,268.65, down 331.75 points (3.13%) from the previous trading day.

The main reason for the stock market rise was the results of the US midterm elections. The Democratic Party took the lead in Congress by securing a majority in the Senate and House of Representatives in this election. Accordingly, Congressional checks on major policies pursued by Republican President Donald Trump are expected to be strengthened.

There is an expectation in the market that the decentralization of power between the executive branch and Congress may limit the possibility of drastic changes in major economic policies, such as tariffs and fiscal spending. With the election results confirmed, some of the uncertainty surrounding future policy direction has been resolved.

However, the easing of political uncertainty did not lead to an increase in all industries. As the possibility of strengthening supervision of the AI ​​industry emerged, selling was concentrated in data center operating companies and semiconductor-related stocks.

In particular, it was noted that the Democratic Party won major elections in states such as Texas and Georgia, where data center investment is active. In these regions, public opinion is forming against the increased power demand and infrastructure burden caused by the construction of large-scale data centers.

Goldman Sachs economists raised the possibility that the Democratic Party's victory in state and local elections could lead to a short-term halt in data center construction. In this case, it was analyzed that approximately 45% of the planned expansion of data center facilities in the United States could be affected. This is a forecast based on the possibility of policy change rather than a confirmed impact from the introduction of actual regulations.

The stock prices of related companies also showed weakness. Companies related to data center operation and infrastructure, such as IREN, Hut 8, Applied Digital, and Core Scientific, fell. On the other hand, some large technology companies such as Amazon, Alphabet, and Meta rose, showing differentiation even within AI-related stocks.

The weakness of the semiconductor industry was also noticeable. As major semiconductor companies such as Nvidia, Micron, and Intel fell, the Philadelphia Semiconductor Index also showed weakness.

In contrast, AMD ended trading at $488.78, up 1.01% from the previous trading day. In the third quarter results announced the previous day, the company announced that data center sales increased 97% compared to the same period last year, and also presented growth forecasts for 2027. However, despite AMD's rise, the overall semiconductor industry continued to remain weak.

Eco-friendly energy stocks showed strength. Solar energy companies drew attention to the possibility that the federal government's support policy for the clean energy industry would be maintained due to the Democratic Party's control of Congress. Major solar energy companies such as First Solar rose, and the Invesco Solar Exchange Traded Fund (ETF) also showed strength.

Defense stocks fell. Major defense companies such as Northrop Grumman, RTX, Lockheed Martin, and L3 Harris all showed weakness. Concerns that President Trump's plan to expand the $1.5 trillion defense budget could be restricted during the congressional deliberation process had an impact.

International oil prices also fell significantly. On the New York Mercantile Exchange, West Texas Intermediate (WTI) crude oil for December delivery ended trading at $88.12 per barrel, down 8.3% from the previous trading day.

The market paid attention to the possibility that the results of the U.S. midterm elections would bring about changes in foreign policy related to the war with Iran. Expectations that the war could end early eased concerns about disruptions in crude oil supply, putting downward pressure on oil prices.

While falling oil prices put a burden on the stock prices of energy companies, it can be a positive factor for other industries in that it can lower corporate costs and inflation pressure.

In the bond market, long-term U.S. government bond yields fell. The U.S. 10-year Treasury bond interest rate stood at 4.88% per annum at the close in New York. The dollar also weakened against major currencies.

In this transaction, the easing of policy uncertainty following the Democratic Party's control of Congress led to an overall rise in the stock market. However, as concerns about the possibility of AI data center regulation and defense budget adjustments emerged, semiconductor, data center, and defense stocks showed a different trend from the major indices.

In the future market, budget and industrial policy negotiations between the Democratic Party-dominated Congress and the Trump administration, discussions on AI data center construction regulations, and movements in international oil prices are expected to act as major variables.