Stocks Rally as Trump Accepts Democratic Sweep - Europe Market Wrap
Global markets rallied after President Donald Trump accepted a Democratic sweep of Congress, with equities rebounding as election uncertainty cleared. Bond yields and the dollar fell on expectations that the result will place greater limits on his policy agenda. S&P 500 futures reversed early losses to gain 1.1%, while Nasdaq 100 contracts also swung sharply higher as buyers returned to beaten-down AI stocks. Tesla and SpaceX-related shares fell following Democratic victories in the Senate and Texas governor’s race. The dollar headed for its biggest daily decline since September, weakening against all major peers. Ten-year Treasury yields slipped three basis points to 4.93%, while European stocks rallied and Asian equities were little changed. Democrats secured victories in traditionally Republican strongholds, leaving Trump facing significantly greater constraints than during the first two years of his second term. Trump said he could work with an opposition-controlled House and Senate “if the Democrats want to work with me”. The moves in bonds and currencies reflect expectations that Democratic control will curb further fiscal expansion, easing concerns over government borrowing.
Global markets rallied after President Donald Trump accepted a Democratic sweep of Congress, with equities rebounding as election uncertainty cleared. Bond yields and the dollar fell on expectations that the result will place greater limits on his policy agenda. S&P 500 futures reversed early losses to gain 1.1%, while Nasdaq 100 contracts also swung sharply higher as buyers returned to beaten-down AI stocks. Tesla and SpaceX-related shares fell following Democratic victories in the Senate and Texas governor’s race.
The dollar headed for its biggest daily decline since September, weakening against all major peers. Ten-year Treasury yields slipped three basis points to 4.93%, while European stocks rallied and Asian equities were little changed. Democrats secured victories in traditionally Republican strongholds, leaving Trump facing significantly greater constraints than during the first two years of his second term. Trump said he could work with an opposition-controlled House and Senate “if the Democrats want to work with me”.
The moves in bonds and currencies reflect expectations that Democratic control will curb further fiscal expansion, easing concerns over government borrowing. Equities, meanwhile, are seen benefiting from lower yields and continued confidence in the resilience of the US economy. The New Zealand dollar led gains among major currencies, rising 0.7% against the dollar. The euro and Swiss franc both advanced 0.4%.