Stocks soar after Democrats take control of Congress

November 4, 2026 / 10:05 AM EST / CBS News Add CBS News on Google The U.S. stock market surged on Wednesday as investors digested the impact of the Democrats' sweeping victories in the midterm congressional elections.The blue-chip Dow Jones Industrial Average soared more than 1,200 points, or 2.4%, shortly after trading opened, while the broader S&P 500 and tech-heavy Nasdaq Composite Index rose 1.7% and 2.1%, respectively. The shifting political winds could affect a range of issues that influence investment returns, from the pace of the data center buildout and cryptocurrency industry regulation to proposals to cap credit card interest rates. At the same time, Wall Street analysts do not expect the outcome to derail a stock market being driven more by robust corporate profits and solid economic growth than by politics. "The magnitude of the gains for the Democrats in the midterms does not change too much for the near-term policy outlook, given the party still lacks a filibuster-proof majority in the Senate and President Trump has veto power to block legislation," Stephen Brown of Capital Economics said in a note to investors. Gridlock good for stocks?Investors also expect the election results to heighten gridlock in Congress, with Democratic lawmakers now in control of both the House and Senate, and President Trump threatening to wield his veto power to block any legislation he opposes.Political gridlock has historically been good for markets because it limits Congress' ability to pass sweeping tax and spending legislation, reducing the risk of volatility, according to Wall Street analysts. Meanwhile, stocks have generally performed well following midterm elections. The S&P 500 stock index rose an average of 15.5% in the six months after the last 14 midterm races, dating back to 1970, according to figures from investment firm Edward Jones."Economic growth, inflation, interest rates and corporate earnings have historically mattered more to broad investment performance than the party composition of Congress, especially if the president and congressional leadership come from different parties," analysts with the Wells Fargo Investment Institute said in a report."We do not expect sweeping policy changes," they added. "More likely, in our view, is a split-government alignment on affordability, energy policy and opportunities from artificial intelligence." In: Dow Jones S&P 500 Nasdaq