U.S. stock futures surged on Wednesday, November 4, 2026, reversing overnight losses after Democrats won majorities in both chambers of Congress and key governorships in the midterm elections. Dow Jones Industrial Average futures jumped more than 800 points as political gridlock eased fears of unchecked executive policy.
The midterm elections changed the balance of power in Washington as Democratic candidates won key Senate and House seats. In Texas, James Talarico won his Senate race despite over $150 million in funding from Elon Musk for his Republican rival, Ken Paxton, according to Business Insider. Gina Hinojosa won the Texas governorship, the first time in decades that a Democrat won a statewide race in the state.
Prediction markets pointed to the outcome as results rolled in, with more than $1.48 billion wagered on the midterm elections, Fox Business reported. President Donald Trump told the New York Times he was absolutely willing
to accept the results and told the Wall Street Journal he and Republicans would work with Democrats, a stance that CNBC noted helped calm investors.
Stocks Rally as Democrats Take Congress
Futures tied to the Dow Jones Industrial Average jumped 803 points, or 1.5%, after falling overnight. S&P 500 futures rose 0.9%, and Nasdaq-100 futures gained 0.5%, according to CNBC.
Market strategists credited the rally to divided government. Still more uncertainty looms, but one thing is certain, there will be gridlock and historically this is good for the market,
said Jay Woods, chief market strategist at Freedom Capital Markets, as reported by CNBC. Andrew Slimmon of Morgan Stanley Investment Management added that markets like gridlock — they don’t like a party with too much power.
Walmart shares climbed 2%, and Bank of America added 1.9%. Health insurers and hospital operators also advanced as investors bet on an end to tougher rules, with Molina Healthcare rising 6.3% and Centene adding 4.7%.
The benchmark 10-year Treasury yield fell 6 basis points to 4.906%, and the U.S. dollar weakened against the euro and British pound, according to Fox Business. Charu Chanana, chief investment strategist at Saxo in Singapore, told Fox Business that markets had initially priced in a stronger-than-expected Democratic showing that could reduce expectations for further fiscal stimulus.
AI Stocks Drop on Texas Data Center Fears
While wider markets climbed, artificial intelligence infrastructure and data center stocks fell sharply. Investors feared that a Democratic-controlled Congress and newly elected state governors would impose tougher rules on power-intensive data centers.
Startup Fortune reports that Texas accounts for a large share of data center spending and projects. The victory of Gina Hinojosa in the Texas gubernatorial race—where she campaigned on tougher limits for data center construction, including an outright moratorium—shook the sector.
Brad Gerstner, CEO of Altimeter Capital, noted during an appearance on the All-In podcast livestream that while fears of a blue sweep making data centers impossible to build were overblown, candidates like Hinojosa could issue a moratorium on new data centers,
making the AI infrastructure trade really challenging,
Business Insider reported.
Evercore ISI analysts led by Amit Daryanani wrote in a note cited by Investing.com:
Assuming a more restrictive data center development environment, this could create incrementally more negative sentiment for AI infrastructure exposed names
Amit Daryanani, Evercore ISI analyst
Daryanani added that while the initial reaction would likely be selling in AI names, the question is how much fundamentals will change and whether factors like inflation and yields will counterbalance over time.
Tech Leaders React on X to Midterm Wins
LinkedIn cofounder and Democratic megadonor Reid Hoffman posted on X that voters had rejected the status quo, writing that voters made clear they demand a different kind of country
and want an economy that can compete globally and deliver for them at home,
according to Business Insider.
Keith Rabois, managing director at Khosla Ventures, posted Another reason to move to Miami
as election returns rolled in overnight, according to Business Insider.
Elon Musk, who spent $446 million supporting Republican candidates during the midterms, reacted to the regulatory pressure facing his home state with irony on X, writing, Data centers in space looking pretty appealing right now,
and joking, Guess my election-interfering space lasers didn’t work this time,
as reported by Business Insider. SemiAnalysis CEO Dylan Patel similarly remarked on X that he was now bullish space datacenters.
Neocloud and hardware stocks dropped in premarket trading following the results. CoreWeave fell as much as 3.2%, Oracle slid 3% to 4%, and Nebius Group dropped 4%, according to Investing.com and Startup Fortune. SpaceX, Elon Musk’s Texas-headquartered firm with data center ambitions, fell 6% on Robinhood’s tokenized shares.
Earlier coverage: US Stock futures fall as AP projects Democratic wins in midterms