S&P 500 Rises 1.6% the Day After Democrats Win Congress; AI Stocks Split

1What happened on Wednesday

The S&P 500 rose 1.6% on Wednesday, November 4, 2026, closing at 7,688.62 after the midterm elections the day before. The S&P 500 is an index that tracks 500 of the largest US companies, so it is a common way to measure the whole stock market. Its election day close was 7,568.92.

The Dow Jones Industrial Average, an index of 30 large US companies, gained 3.0% to close at 53,356.12. The Nasdaq Composite, which holds many technology companies, rose 1.4% to 25,736.51. The Russell 2000, an index of smaller companies, rose 1.6% to 2,856.95.

The VIX fell 20.3%, from 20.83 to 16.61. The VIX is often called the market's fear gauge: it measures how much movement traders expect in the S&P 500 over the next month, so a lower reading means traders expect calmer trading. The 10-year Treasury yield, the interest rate the US government pays to borrow for 10 years, slipped to 4.89% from 4.95%, a drop of about 6 basis points. A basis point is one hundredth of a percentage point.

2The election result

Democrats won control of both the House of Representatives and the Senate in the November 3, 2026 midterm elections, CNBC reported. As of Wednesday afternoon, Democrats had flipped 7 Senate seats held by Republicans and at least 24 House districts, and Republicans had not flipped a congressional seat held by Democrats, according to Associated Press data reported by CNBC.

Some races had not yet been called on Wednesday: 9 House seats, 2 Senate seats and 2 races for governor. With a Republican President, the result sets up divided government once the new Congress takes office, with one party holding the White House and the other holding Congress. Laws still need the President's signature, or votes from two thirds of both chambers to override a veto.

3The biggest gainers

We tracked 34 stocks and 9 industry funds. This table shows some of the largest gains among them on Nov. 4.

Gains were not limited to technology stocks, and the technology sector fund (XLK) ended the day flat. Banks rose, with Bank of America (BAC) up 4.0%, and health care rose, with Johnson & Johnson (JNJ) up 3.8%. A broad clean energy fund (ICLN) rose 3.0%.

4The biggest decliners

Among the same 34 stocks and 9 funds, this table shows some of the largest declines on Nov. 4.

Defense and oil companies fell along with several AI hardware names. Northrop Grumman (NOC) lost 4.5% and Chevron (CVX) lost 3.7%. Tesla (TSLA) fell 3.3%, and the industrials fund (XLI) lost 1.1%.

5A split inside AI stocks

AI stocks moved in two directions on Nov. 4. The largest cloud companies, which rent computing power to other businesses and spend heavily on AI, rose. Several smaller AI computing providers and data center equipment makers fell. A data center is a building full of computers that run websites and AI programs.

• The largest cloud companies rose: Microsoft gained 6.7%, Amazon 6.1%, Alphabet (GOOGL) 3.2% and Meta Platforms (META) 1.4%.
• AI computing providers and suppliers fell: Vertiv, which makes power and cooling equipment, lost 12.9%. CoreWeave and Nebius, which rent out AI computing power, lost 9.9% and 6.7%. Applied Digital, which builds data centers for AI customers, lost 6.7%.
• Chipmakers were mixed: Micron lost 7.0%, Nvidia (NVDA) 3.2% and Intel (INTC) 3.8%. Qualcomm, whose largest business is smartphone chips, rose 5.3%.
• The two largest data center landlords rose: Equinix (EQIX), which owns and leases data center buildings, gained 3.9%, and Digital Realty (DLR) gained 2.6%.

Data centers were also on local ballots. Voters decided 41 local measures about data centers on Tuesday and sided against the data centers in 40 of them, according to CNBC. In a CNBC voter poll, 56% of voters said data centers were a crucial or major factor in their vote.

6How past midterms compare

We measured the S&P 500 around every midterm election from 1950 to 2022, 19 in all, using the index's closing prices without dividends. In every one of those 19 years, the index was higher 12 months after the election than at its last close before the results. The median gain over those 12 months was 14.5%. The median is the middle value when all the results are lined up from lowest to highest.

The smallest 12 month gain was 1.1% after the 1986 midterm, a period that included the October 1987 crash. The largest was 33.2% after 1954. On the first trading day after the election, the index rose in 15 of the 19 years, with a median move of 0.6%, so this year's 1.6% gain was larger than usual.

This table shows the most recent midterms. The 12 month figure for 2026 does not exist yet.

Six of the 19 midterms created a new divided government, as this one is set to. The median 12 month gain after those 6 was 13.1%, against 14.9% for the other 13. With only 6 cases, the comparison is too small to show whether divided government helps or hurts stocks. History describes what happened before, and it is not a forecast of the next 12 months.

7What to watch

• The last uncalled races: 2 Senate races, 9 House seats and 2 governor races had not been called as of late Wednesday, so the final size of each majority was not yet known.
• The new Congress: under the Constitution, the newly elected members' terms begin at noon on January 3, 2027. Until then, the current Congress keeps its seats.
• Data center rules: many decisions about where data centers can be built are made by states and towns, where voters decided 41 local data center measures on Tuesday, according to CNBC.
• CoreWeave's results: CoreWeave is scheduled to report quarterly results on November 10, 2026, after the market closes. An earnings report can move a stock 10% or more in either direction.

8The Market Eyes read

Market Eyes rates stocks on a 0 to 100 score built from eight factors, including valuation, quality and momentum. Here is what the ratings read for four of the most moved names, as of Nov. 4 and 5.

• Microsoft: Favorable, with a score of 68. Its strongest factor is quality at 94, and its weakest is catalyst at 36.
• Amazon: Promising, with a score of 53. Its strongest factor is sentiment at 77, and its weakest is catalyst at 24.
• CoreWeave: Very Promising, with a score of 62. Its catalyst factor reads 100 and its quality factor reads 2. Its flagged risks include debt of 7 times equity and negative free cash flow.
• Vertiv: Hold, with a score of 55. Its earnings factor reads 93, and its momentum factor reads 19.

Promising and Very Promising are labels for companies whose fundamentals are less established, and they are not ranked against Favorable and Hold. A rating describes conditions now. It is not a forecast and it is not a recommendation to buy or sell.