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Photo: Xinhua/Wang Ying via Getty Images

Stocks jumped on Wednesday — the tech-centric Nasdaq closed up 3.8%, outpacing the S&P and Dow's gains — with the presidential race up in the air and Democrats' hopes of gaining control of the Senate fading.

Why it matters: Alongside health care stocks, tech companies that helped propel stocks back to record highs are leading the market as full results from the 2020 election remain unknown.

What they're saying: "Investors appear to be pricing in increasing odds of a divided government, which may take major tax increases and some regulatory risk off the table," Ryan Detrick, an analyst at investment firm LPL Financial, wrote Wednesday morning.

The big winners: Tech and health care/pharma stocks.

  • Shares of Facebook rose 8%, while Google-parent Alphabet and Amazon jumped 6%.

Cigna, Anthem and UnitedHealth were among the best performing stocks in the S&P 500 and saw shares soar by double digits.

  • Our thought bubble via Axios' health care business reporter Bob Herman: Investors are betting that Biden plus a divided Congress equals status quo, which has been very profitable.
  • But: Hospital stocks fell because they have the most to lose if the Supreme Court invalidates the Affordable Care Act (and a divided Congress wouldn't allow Biden to come up with an ACA replacement), per Bob.

By the numbers: The S&P 500 closed up 2.2%, while the Dow Jones Industrial Average gained 1.3% (or 367 points).

  • The rally continued the stock market's recent winning streak leading up to the election.

Editor's note: This story has been updated to include the stock market close.

Go deeper

Updated Jan 28, 2021 - Economy & Business

Senate panel to hold hearing after high-flying Reddit stocks cause Wall Street chaos

Major trading platforms including Robinhood, TD Ameritrade and Interactive Brokers are restricting — or cutting off entirely — trading on high-flying stocks like GameStop and AMC Entertainment.

The latest: Senate Banking Committee Chair Sherrod Brown (D-Ohio) announced Thursday that he plans to hold a hearing on "the current state of the stock market" in response to this week's volatility.

Dion Rabouin, author of Markets
Jan 28, 2021 - Economy & Business

How GameStop exposed the market

Illustration: Eniola Odetunde/Axios

Retail traders have found a cheat code for the stock market, and barring some major action from regulatory authorities or a massive turn in their favored companies, they're going to keep using it to score "tendies" and turn Wall Street on its head.

What's happening: The share prices of companies like GameStop are rocketing higher, based largely on the social media organizing of a 3-million strong group of Redditors who are eagerly piling into companies that big hedge funds are short selling, or betting will fall in price.

Dion Rabouin, author of Markets
Jan 29, 2021 - Economy & Business

Making sense of the GameStop circus

Illustration: Aïda Amer/Axios

It's probably fair to say that Thursday was one of the crazier days in the history of financial news.

What happened: Robinhood, which has become synonymous with retail trading and the parabolic rise of stocks like GameStop and Tesla, shut down the ability of its users to buy (but not to sell) some of the platform's most popular names.