US stocks jump at the open after midterm results

AFP New Delhi, Delhi, India Nov 07, 2018, 08.20 PM(IST)

File photo. Photograph:( Reuters )

Wall Street stocks rose early Wednesday after Democrats won control of the House of Representatives in key midterm elections even as President Donald Trump's Republican party increased its Senate majority.

About 20 minutes into trading, the Dow Jones Industrial Average was up 0.8 percent at 25,829.66, gaining speed after the open.

The broad-based S&P 500 advanced 0.9 percent to 2,781.46, and the tech-rich Nasdaq Composite Index gained 1.0 percent to 7,451.92.

With a handful of races still too close to call, Democrats were on track to capture some 30-35 House seats, taking control and providing a check on Trump's policies. 

But Republicans appeared likely to win three to five Senate seats and solidify their control of the upper house following Tuesday night's vote.

Analysts said the market's gains reflected relief that an event viewed as a source of uncertainty had finally passed.

A Democratic sweep of Congress would have been seen as a threat to Trump's agenda and providing momentum to calls for an impeachment investigation, while a Republican sweep would have bolstered the odds for additional tax cuts that could have worsened the US fiscal outlook, analysts said.

Goldman Sachs said the election would yield no major changes on taxes or trade, while an infrastructure deal "seems unlikely." 

But Goldman said the Democratic win in the House opens the door to potential passage of legislation to limit drug prices, an objective Trump has also emphasized at times.