NEW YORK: US stock futures surged on Wednesday after Democrats secured majorities in both chambers of Congress in the midterm elections, while President Donald Trump accepted the results, easing political uncertainty that had weighed on Wall Street.
Futures tied to the Dow Jones Industrial Average jumped 1,083 points, or 2.1%, while S&P 500 futures gained 1.1%. Nasdaq-100 futures rose 0.4%, underperforming other major indexes amid weakness in artificial intelligence-related stocks.
Democrats won control of both the House of Representatives and the Senate, along with key gubernatorial races, including Texas. The results are expected to give Democrats greater influence over Trump's policies during the remainder of his presidency.
Trump told The New York Times that he was "absolutely willing" to accept the election results and told The Wall Street Journal that he and Republicans would work with Democrats.
Market analysts attributed part of Wednesday's rally to Trump's initial reaction to the results and expectations of a divided government.
Jay Woods, chief market strategist at Freedom Capital Markets, said the president's response helped support the rebound, adding that political gridlock has historically been positive for financial markets.
Shares of companies expected to benefit from a more stable economic environment led early gains. Walmart rose 2%, while Bank of America advanced 1.9%, as investors shifted attention toward sectors beyond technology.
Health insurers and hospital operators also gained amid expectations that Democratic policies could benefit the healthcare sector. UnitedHealth rose 1.4%, Molina Healthcare climbed 6.3%, Centene gained 4.7% and HCA Healthcare advanced 1.44%. The Invesco Solar ETF jumped 5%.
However, technology stocks linked to artificial intelligence faced pressure amid concerns over potential restrictions on data center development under Democratic leadership.
Oracle and CoreWeave shares were heading lower, while Elon Musk's SpaceX also faced pressure. The concerns followed the victory of Texas gubernatorial candidate Gina Hinojosa, who has pledged an immediate moratorium on new data centers in the state, a major hub for the industry.
Investors had expressed concerns before the election that a Democratic sweep could lead to tighter regulations on data centers and affect companies involved in the artificial intelligence infrastructure expansion.
Historical market trends also supported investor optimism, as Wall Street has often performed well under divided government, when political gridlock limits major policy changes.
Andrew Slimmon of Morgan Stanley Investment Management said markets generally favour political gridlock rather than excessive power concentrated in one party.
Speaking to CNBC's "Squawk Box Europe," Slimmon added that the election results could also increase pressure for a resolution to the Middle East conflict, potentially bringing oil prices down.
Lower oil prices could help ease inflationary pressures and reduce concerns facing the Federal Reserve, which has been dealing with elevated energy costs and interest rates.
