Stocks surge after blue wave in midterms: 5 takeaways for investors

1. The removal of uncertainty is driving market momentum.

Traders are happy the election's over. Now that they know what's next, they're breathing a sigh of relief after a protracted period of uncertainty.

• "And let's not forget that history shows a big rally post-midterm elections is quite normal and we could be seeing history repeat once again this year," wrote Ryan Detrick, chief market strategist at Carson Group.
• The Dow closed up 1,569 points, while the S&P 500 index and Nasdaq ended the day up 1.6 and 1.4%, respectively.

Investors see gridlock as good. The seemed to like the fact that the next two years are likely to be defined by it in Washington.

• "Expect investigations, not legislation," Jefferies analyst Aniket Shah wrote in a research note.

2. You're probably having a better day in the markets than Elon Musk.

Ok, so you're not a trillionaire, but your portfolio probably rose today, while Musk's decidedly did not. In fact, he's not a trillionaire anymore either.

• SpaceX and Tesla shares fell 3.8% and 3.3% despite the broader market rally, as the election results went against the wishes of the world's richest person.
• "Data centers in space looking pretty appealing right now," Musk said early Wednesday on X.

3. It was a punch to the gut for earthly data center proponents.

Voters embraced the equivalent of data center moratoriums in 43 of 44 spots, according to Brad Carson, president of Americans for Responsible Innovation.

• Tech analyst and AI bull Dan Ives estimated a 10% reduction in data center construction after the backlash.
• But "some tech investors will actually view these midterms as a slight positive cause it will force a slowdown of the AI datacenter buildout and therefore slow the pace of capex dollars into 2027/2028 and slow the massive amount of capital raises seen by Big Tech in this AI Arms Race flooding the market," Ives wrote in a research note.

4. It was a win for some unions and a loss for others.

Union leaders like the UAW's Shawn Fain got what they wanted: a repudiation of what he calls the "billionaire class."

• Fain blasted Musk for spending heavily on the election and said Congress needs to take action to regulate AI companies.
• "They're literally trying to displace humanity. We are in a fight for humanity at this point," he told reporters Wednesday. "We have to hit the brakes."

But unions representing electricians, plumbers and pipe fitters won't be happy to see the surging opposition to data centers, which are creating trade jobs.

• They recently banded together with investment firms like Blackstone and AI companies like OpenAI to create the American Infrastructure Alliance to support data centers.

5. Consumers angry about gas prices might get more relief.

The U.S. benchmark price of crude oil plunged 8%, falling below $90 per barrel in a potential prelude to lower prices at the pump.

• With President Trump and VP JD Vance acknowledging that voters were upset about the Iran war, investors are anticipating a possible easing of tensions with "the chances of a ceasefire increasing," according to Jeremy Richardson, senior portfolio manager of global equities at RBC Global Asset Management.
• "This would relieve pressure on inflation and interest rates."