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World stocks rally as investors expect more political certainty after Democrats’ win
Global stocks climbed after Democrats won control of both chambers of the US Congress in the midterm elections, easing uncertainty that had weighed on markets. The result was a major setback for President Donald Trump and raised expectations of tighter congressional scrutiny of artificial intelligence and greater oversight of US policy.
The Dow rose 3.03 per cent, the S&P 500 gained 1.58 per cent and the Nasdaq advanced 1.44 per cent; the MSCI All-World index rose 1.38 per cent. Brent crude fell nearly 9 per cent to US$94.62 a barrel, while the US 10-year Treasury yield dropped 6.62 basis points to 4.88 per cent. The dollar weakened, while gold, bitcoin and ether rose.
In short
- Democrats’ midterm wins lifted global share markets.
- The Dow gained 3.03 per cent.
- Oil fell nearly 9 per cent as investors weighed US policy.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Supporters could argue that divided political power may make policy more predictable by limiting abrupt changes and encouraging oversight, which can reassure investors. Tighter scrutiny of artificial intelligence and other policies may also reduce regulatory or systemic risks over time.
The case against
Others could argue that control of both chambers by the opposition may intensify political conflict, delay legislation and make government decisions less predictable. Greater scrutiny or new rules for artificial intelligence and other sectors could also weigh on investment and growth, even if markets initially welcomed the election result.
Explained simply
The US Congress makes federal laws and oversees the government. It has two chambers, the House of Representatives and the Senate; control of both can give one party more influence over legislation and investigations, while the president remains responsible for the executive branch.
Financial markets respond to expectations about economic policy, government oversight and the wider economy. Stocks are shares in companies, while Treasury bonds are loans to the US government; their prices and yields, along with currencies and commodities such as oil and gold, can move for different reasons as investors reassess risks.