Wall Street indexes responded positively to the midterm elections results, as they not only meet the expectations of the markets, but the uncertainty that has leveled over them is already distracting. The US indexes rose further when President Donald Trump said he was ready to work with Democrats on policy initiatives that would help the economy continue to grow.
The blue-chip index Dow Jones Industrial Average added 545.29 points to its value, driven by the strong performance of UnitedHealth and Apple. The broader S&P 500 expanded by 2.12% after the health, technology and consumer sectors rose by more than 2.8%. The technology index Nasdaq Composite jumped by 2.64%.
The rise in US indexes on Wednesday, the day after the midterm elections, is higher than the average growth rates reported following such votes. Goldman Sachs said the average increase of the S&P 500 following such votes is 0.7%. The largest movement of Dow Jones and S&P 500 in a similar situation was observed in 1982 when, after the midterm election, the indexes rose by 4.3% and 3.9% respectively.
“Hopefully we can all work together next year to continue delivering for the American people. Including on economic growth, infrastructure, trade, lowering the cost of prescription drugs”m said Donald Trump.
The results of the midterm elections showed that Democrats won the House of Representatives, while the Republicans retained control of the Senate.
Investors expect Trump’s business support policies to continue, while some express optimism that Congress will provide greater insight into some of the US President’s actions.
Among the rising shares in the session were Caterpillar, Goldman Sachs, Amazon and Alphabet.
The optimism that Donald Trump will work with Democrats on infrastructure development projects also supported Vulcan Materials and United Rentals, which grew by 4.5% and 0.9%, respectively.
The technology sector also remains optimistic after the vote because a split in powers means that President Donald Trump may find it much harder to take action against companies like Amazon, for example.
But trade is an area that will remain under Trump’s control.
Meanwhile, the Federal Reserve has started its two-day meeting on Wednesday. The worries about rapid interest rate hikes have plagued markets last month. The expectations are next hike to be in December, with the tightening of monetary policy likely to continue in 2019.