U.S. stocks jumped the day after the midterms
stocks rose after Democrats won both chambers of Congress and oil prices crashed. DK's close was S&P 500 up 1.58%, Nasdaq up 1.44%, Dow up 3.03%, and Russell 2000 up 1.58%.
Easy version of the November 5 morning note. It covers the prior U.S. session. This is not investment advice.
In one line, U.S. stocks rose after Democrats won both chambers of Congress and oil prices crashed. Chips, power equipment, and defense stocks were weak.
An index is a score made by putting many stock prices into one basket. DK's close was S&P 500 up ▲ 1.58%, Nasdaq up ▲ 1.44%, Dow up ▲ 3.03%, and Russell 2000 up ▲ 1.58%.
Discretionary consumer goods rose ▲ 4.3%, financials 3.5%, staples 3.4%, health care and real estate 3.1% each, materials 2.5%, drugs 1.6%, and utilities 0.5%. Energy fell 4.7%, semiconductors 2.7%, and industrials 1.1%.
Cheaper fuel hope sent Delta Air Lines up ▲ 7.17% and Carnival up 7.26%. Hope that health and food-aid cuts could ease sent HCA Healthcare up 10.35% and Centene up 12.67%. Hope that clean-energy tax credits, amounts subtracted from taxes owed, would stay sent First Solar up 4.62% and Enphase Energy up 3.62%.
Big technology stocks rose on the idea that slower data center construction could help companies that already own capacity. Microsoft rose ▲ 6.71%, Amazon 6.18%, Alphabet 3.21%, and Apple 5.33%. Memory and storage fell on the opposite worry. Micron fell 7.01% and SanDisk 7.92%. Nvidia fell 3.14% and Broadcom 1.96%. AMD rose 0.99% but gave back much of an early gain from strong earnings.
Server-rental names fell after the Texas governor-elect pledged a pause on new data center construction. IREN fell ▼ 11.20%, CoreWeave 9.94%, and Nebius 6.65%. Vertiv fell 12.88% and GE Vernova 9.31%. Defense stocks fell on worry that Congress could slow a bigger defense budget. Lockheed Martin fell 6.90% and Northrop Grumman 4.53%. Exxon Mobil fell 4.53% as oil dropped on hopes the Iran war could end.
McDonald's rose ▲ 6.53%. Third-quarter revenue was $7.157 billion, up ▲ 1.12%, and operating profit was $3.595 billion, up ▲ 7.09%. Adjusted earnings per share, profit per share after one-time costs are removed, was $3.57 and beat forecasts. Arm fell ▼ 5.17%. Royalty revenue of $670 million missed the $712 million forecast, and the stock fell 1.31% after hours. After-hours means trading after the regular close. Qualcomm rose 5.42% in the regular session, then fell 6.72% after hours because next-quarter adjusted earnings-per-share guidance of $2.25 missed a $2.32 forecast in this note. Coherent fell ▼ 5.91% in the regular session, then rose 7.27% after hours as AI data center optical demand lifted revenue 50%.
Oil crashed. WTI fell ▼ 8.29% to $88.12, and Brent fell 8.67% to $94.62. A report said Trump had no plan to attack Iran immediately. U.S. crude and gasoline inventories fell more than expected, but oil still closed near the day's low.
Treasury yields, the price the U.S. government pays to borrow, fell. The 2-year was 4.583%, the 10-year 4.884%, and the 30-year 5.273%. The dollar fell 0.34%, gold futures rose 3.30% and recovered the $4,000 line, and bitcoin rose 1.99%. The Treasury kept next-quarter auction sizes unchanged, but removed the word "minimum" from its keep-sizes language, which DK said left room to issue more in 2027.
October private payrolls rose 86,000, above the 69,000 forecast. The October services score was 54.5, a bit below the 54.8 forecast and the prior 54.9. A score above 50 means expansion. The jobs score rose to 51.4 from 50.1. The price score eased to 73.0 from 74.0 but stayed above 70.
Three lines to keep. Election uncertainty faded and oil crashed, so big technology, airlines, and hospitals rose. Delay worry stayed on chips and power equipment. Treasury yields fell, and gold recovered $4,000.
The utility gain is written as 0.5% because of a missing closing parenthesis.