US stocks rally as Dow surges 1,569 points after Democratic midterms sweep; biggest post-midterm gain in 44 years

US stocks rallied sharply on Wednesday as investors assessed the sweeping Democratic victory in the 2026 midterm elections and considered the potential impact of a divided government on the war with Iran, President Donald Trump's policy agenda and the artificial intelligence (AI) trade. The Dow Jones Industrial Average jumped 1,569 points, or 3%, recording its strongest single-day performance since April 2025. It also marked the index's biggest post-midterm election daily gain since 1982, according to CFRA Research data.

The S&P 500 advanced 1.58%, registering its second-largest single-day gain following midterm elections since 1982, behind its rise after the 2018 midterm elections. Meanwhile, the Nasdaq Composite climbed 1.44%, marking its biggest post-midterm election daily increase since 2018.

Also Read: ‘You can call me Senator’: From Texas To Maine, watch Democrats celebrate historic 2026 midterm wins

Oil prices tumble

Oil prices remained under pressure throughout the trading session, extending their losses after US Vice President JD Vance said in a social media post that the Republican Party's defeat was driven by public opposition to the war with Iran. The conflict has pushed up the cost of fuel and other essential goods.

Crude oil prices ended the session down more than 8%, with both major benchmarks trading below $100 a barrel. The decline in oil prices provided an additional boost to US equities, which had already opened higher after major European stock markets recorded positive trading sessions. All three major indices finished solidly higher, with the Dow ending up 3%, or more than 1,500 points at 53,356.12.

All three major US stock indices closed firmly in positive territory. The Dow finished 3% higher, gaining more than 1,500 points to close at 53,356.12. Meanwhile, opposition to data centres emerged as an issue driving election campaigns in key states, including Texas, Georgia and Ohio, where Democrats won gubernatorial races previously held by Republicans.