U.S. markets are rallying on Nov. 4 after the Democratic Party won a decisive victory in the midterm congressional elections.
The blue-chip Dow Jones Industrial Average was up 800 points in premarket trading on news that the Democrats have taken control of both the U.S. House of Representatives and Senate.
The benchmark S&P 500 and technology-heavy Nasdaq Composite index are also each firmly in the green the day after Americans went to the polls.
Democrats won majorities in both the House of Representatives and Senate. They also scored victories in key gubernatorial races in traditionally Republican states such as Texas.
With most ballots counted, the Democrats held 54 seats in the U.S. Senate versus 44 seats for the Republican Party.
In the House of Representatives, the Democrats won 228 seats compared to 139 for Republican lawmakers.
The Democrats will now be able to put a check on the policies of Republican President Donald Trump, who’s tariffs and war in Iran have proved deeply unpopular with the electorate.
Importantly, Trump told the media that he accepts the results of the midterm elections and that he and the Republican Party will work with Democrats in Congress.
Trump’s comments have reassured election officials and financial markets that there will be a peaceful transfer of power in Washington, D.C.
Democrats also won decisive victories in Canadian border states such as Maine and Michigan where Trump’s tariffs on imports from Canada have caused widespread anger.
Republican Senator Susan Collins of Maine, who had been in Congress for more than 30 years, lost her seat to a progressive Democratic candidate as tariffs were a major issue in the state.
In the final days of the midterm election campaign, Trump had said repeatedly that the U.S. and Canada were close to reaching a new trade deal that would lower or eliminate many tariffs.
However, Canadian Prime Minister Mark Carney said that while progress on a trade agreement was being made, his government was not yet ready to sign a new deal.
The post-election rally comes after weeks of volatility on Wall Street after a spate of earnings from big technology companies raised questions about the artificial intelligence (AI) trade.
The S&P 500 index in the U.S. is up 10% year-to-date.
