Dow rises by 250 points after midterm elections signal split Congress; Fed policy update looms

Dow rises by 250 points after midterm elections signal split Congress; Fed policy update looms

U.S. stock benchmarks opened solidly higher early Wednesday, as investors braced for a divided Congress and looked ahead to an updated policy statement from the Federal Reserve on Thursday. The Dow Jones Industrial Average DJIA, +0.87% climbed 238 points, or 0.9%, at 25,868, the S&P 500 index SPX, +1.03% advanced 1.2% at 2,787 , while the Nasdaq Composite Index COMP, +1.16% rose 1.3% at 7,470. As expected, Democrats gained a majority in the House while the GOP tightened the grip of the Senate, which could result in political gridlock in the final two years of President Donald Trump’s first term in office. However, that political dynamic has generally been conducive to equity markets rising, but the current atmosphere also is complicated by a late-cycle economic expansion and tense talks between the Trump administration over trade relations with China. Also on investors’ radar an important the Fed gathering, which isn’t expected to result in an interest rate hike at 3 p.m. Eastern Time Thursday, but could offer further clues about how Jerome Powell’s central bank thinks about the pace of policy normalization. The only significant data on deck later in the session was a reading on consumer credit slated to be released at 3 p.m. Meanwhile, the energy sector XLE, +1.22% was enjoying a bounce in tandem with rising crude-oil prices CLZ8, +0.87% ahead of a key meeting of OPEC members that could result in reductions in global supply. Shares of Anadarko Petroleum Corp. APC, +6.10% and Pioneer Natural Resources Co. PXD, +6.79% were rising in early trade. Meanwhile, shares of fashion retailer Michael Kors Holdings Ltd. KORS, -15.70% were tumbling after missing revenue expectations in a Wednesday morning earnings release.

Have breaking news sent to your inbox. Subscribe to MarketWatch’s free Bulletin emails. Sign up here.

Related posts