Market Quick Take - Dow jumps 3% after Democrats sweep Congress - 5 November 2026

Market drivers and catalysts

• Macro: Democrats taking control of both chambers of Congress and slumping oil prices reverberate across markets
• Equities: US and European equities rallied after the Democratic midterm sweep, Asia was mixed as Korean chipmakers came under pressure.
• Volatility: Implied volatility collapsed once the election was settled and the VIX curve returned to contango
• Digital Assets: Crypto equities rose with risk assets while legislative prospects dimmed after the vote
• Commodities: Oil’s post-election slump deepens as gold benefits from a weaker dollar and easing inflation and rate concerns
• Fixed Income: Global bond yields fall back on tumbling oil prices.
• Currencies: USD weaker early Thursday as USDJPY pushed lower from key resistance.

Macro

• Democrats won control of both the US Senate and the House in Tuesday's midterm elections. US equities and Treasuries rallied on Wednesday while the dollar and oil fell and equities rose. President Trump said Republican losses were largely linked to the Iran conflict and rising fuel prices and signalled no immediate escalation of strikes.
• US private payrolls rose 86,000 in October, above forecasts, ahead of Friday's official jobs report. The ISM services index fell to 54.5, a three-month low, while the September trade deficit narrowed to USD 105.0 billion against USD 107.9 billion expected.
• The Treasury's quarterly refunding kept next week's 3-, 10- and 30-year auctions unchanged at a combined USD 125 billion but softened its pledge to hold auction sizes steady, which dealers read as opening the door to smaller long-dated issuance in 2027.
• The Bank of England decides today, with most banks expecting a hold, and Toyota, Sony, Airbnb, Booking and Marriott report. US October payrolls follow on Friday.

More in our Macro Analysis & Macroeconomic News

Macro calendar highlights (times in GMT)

• 0700 – Sweden Oct. Flash CPI
• 0700 – Germany Sep. Factory Orders
• 0900 – Norway Norges Bank Deposit Rate announcement
• 1030 – US Oct. Challenger Job Cuts
• 1200 – UK Bank of England Rate Announcement
• 1330 – US Weekly Initial Jobless Claims
• 1500 – Sweden Riksbank Governor Thedeen to speak
• 1530 – US Weekly Natural Gas Storage Change
• 1600 – ECB President Lagarde to speak
• 1745 – ECB’s Nagel to speak
• 1900 – Mexico Overnight Rate

Earnings events

• Thursday: ConocoPhillips, Deutsche Telekom, Canadian Natural Resources, Parker-Hannifin, Southern Company, Cloudflare, Duke Energy, Airbnb, Monster Beverage, Lumentum
• Friday: Enbridge, Moderna

For all macro, earnings, and dividend events check Saxo’s calendar.

Equities

• USA: US equities rallied on Wednesday after Democrats won both chambers of Congress, with the Dow up 3%, the S&P 500 gaining 1.6%, and the Nasdaq 100 advancing 0.9%. Falling oil prices and hopes for greater political stability supported sentiment, although investors increasingly favoured established technology companies over AI infrastructure suppliers. Microsoft jumped 6.7% and Amazon rose 6.1% on expectations that slower data-centre expansion could ease spending pressures, while Apple gained 5.3% as lower memory costs offered potential margin relief. Nvidia fell 3.2% on concerns over tighter AI regulation, while Qualcomm declined in after-hours trading as weak smartphone demand overshadowed its earnings outlook.
• Europe: European equities also rallied on Wednesday, with the Stoxx Europe 600 rising 1.8%, Germany’s DAX gaining 2.2%, and the UK’s FTSE 100 adding 1.8%. Banks and renewable energy led as investors anticipated less US pressure on European lenders and more favourable clean-energy policies, while falling oil prices weighed on energy shares. HSBC gained 4.8% amid the banking rally, Novo Nordisk rose 5.6% after raising its annual outlook, and Pandora surged 10.9% following stronger-than-expected quarterly results. Defence stocks lagged on concerns that Democratic control of Congress could limit US military spending, while investors looked ahead to the Bank of England’s interest-rate decision.
• Asia: Asian equities diverged on Thursday, with Japan’s Nikkei 225 falling 1.9% and South Korea’s Kospi dropping more than 5% in morning trading, while Australia’s ASX 200 gained 2.6%. Concerns that tighter US regulations could slow data-centre expansion weighed heavily on Korean semiconductor stocks, with SK Hynix falling nearly 10% and Samsung Electronics losing around 8%. Australian miners benefited from higher precious-metal prices, although falling oil prices pressured regional energy stocks.

More in our Equity Trading - Stock Market Analysis & News

Volatility

VIX 16.61 | VIX FUTURES: 17.900 (Nov) | TERM STRUCTURE: CONTANGO | SKEW: ELEVATED (150.90) | MARKET REGIME: TRANSITIONING | AS OF ~05:00 CET

• Traders unwound the election hedge in a single session once Democrats took both chambers. The VIX fell about a fifth to 16.61 and VIX1D roughly halved, so protection now costs far less than it did on Tuesday. The election hump in the futures curve has gone and contango is back, leaving near-term cover cheap and premium priced beyond year-end. SKEW held near 150, so downside puts remain expensive relative to the rest of the options chain even as overall vol fell.
• The MOVE index dropped 6%, confirming the calm in rates. Options price about 43 points (0.55%) for today and 0.87% into Friday's payrolls, so a bigger swing around the Bank of England decision at 13:00 CET would exceed what the market expects.

More in our Options Trading - Stock Market Analysis & News

Digital Assets

BITCOIN ~80,480 +0.10% | ETHEREUM ~2,423 +0.06% | IBIT 45.33 +2.91% | ETHA 54.74 +5.72% | AS OF ~05:00 CET

• Crypto equities split on Wednesday along a line drawn by the Texas vote rather than by bitcoin. Miners building AI data centres in Texas sold off hardest. Cipher lost almost a fifth and CleanSpark about 17%, after the incoming governor called for a moratorium on new data centres and brokers cut their targets.
• Strategy and Coinbase gained 4% to 5% with risk assets, and Block jumped 15.30% on an earnings beat led by Cash App. Bitcoin climbed back above USD 80,000 after a dip near USD 75,700. The Democratic sweep has narrowed the CLARITY bill's path in its current form, leaving US market-structure rules unresolved.

Commodities

• Oil: Brent trades near USD 94, down from above USD 117 last week, as hopes for a negotiated end to the Iran conflict continue to weigh on prices. Prices tumbled 8% following the US midterm elections, with Trump acknowledging that the war and rising fuel prices contributed to Republican losses while signalling no immediate escalation of strikes. A Democratic-controlled Congress could increase pressure to end the conflict. However, no deal has been reached, and the two sides may still be far apart. So far, oil has slumped more on hopes than concrete progress, leaving prices vulnerable to a rebound unless both Tehran and Washington signal a genuine willingness to compromise.
• Precious metals: While energy prices have slumped, precious metals have emerged as major winners following the US elections. The powerful combination of falling energy prices, easing inflation and interest rate concerns, and declining Treasury yields and the dollar has forced recently established speculative shorts to cover. Over the past two months, ETF investors absorbed much of the gold selling from hedge funds, which have now returned to the buy side amid an improving technical and fundamental outlook. Gold has broken through several resistance levels, with the next major hurdles at USD 4,186 and USD 4,225. Some consolidation appears likely first, not least because the oil price slump has so far been driven more by hopes of a Middle East peace deal than tangible progress towards one.

More in our Commodity News, Analysis & Commentary

Fixed Income

• US Treasury yields fell on the back of tumbling oil prices, with the benchmark 2-year treasury yield dropping back five basis points to 4.58% ad falling lower still in early trading Thursday to 4.55%. The benchmark 10-year yield fell seven basis point to 4.89% and dropped lower still in early trading Thursday, down four basis points and below 4.85%, its lowest level since September. At the US Treasury’s Quarterly Refunding Announcement, no changes to the size of coming treasury auctions was announced after speculation that the Treasury might look to cut the size of the auctions for the longest dated notes and T-bonds.
• Japan’s longer-dated government bonds rallied Thursday, sending the benchmark 10-year JGB yield some six basis points lower to its lowes level since July at 2.76%. At the front end of the curve, the 2-year yield also fell three basis points as the market moderated BoJ policy tightening bets, eyeing its lowest closing level since mid-September near 1.87%.

Currencies

• The US dollar dropped back again early Thursday after choppy trading in the wake of the mid-term elections. EURUSD trades near local highs above 1.1250, eyeing a line of resistance near 1.1270 as lower treasury yields and tumbling oil prices take some pressure off the economic outlook for Europe and concerns on the stability of the French sovereign debt market. USDJPY squeezed higher Wednesday into 158.50 resistance again, but dropped back below 158.00, with the JPY finding a measure of relief on lower global bond yields and oil prices as the country is so reliant on oil imports.
• Sweden’s Riksbank hiked its policy rate 25 basis points as expected, mentioning the direction of the SEK as an inflation risk in its statement and said economic activity is strengthening. The bank also announced changes to its handling of FX reserves, as it said it would drop the use of FX swaps in managing its reserves, replacing them with foreign-currency borrowing, apparently a move to manage balance sheet risk, as the bank explicitly stated that there was no monetary policy angle on the move. EURSEK edged lower still after its recent sell-off, now trading solidly below its 200-day moving average at 10.92.
• Norway’s Central Bank meets this morning – expected to hold its Deposit Rate at 4.50%, while the market is expecting a dovish downshift in its forward guidance. NOK has weakened over the last few days on tumbling oil prices.
• The Bank of England is set to meet later today as EURGBP trades near its lowest levels in 17 months, expected to bring a rate hike to take the rate to 4.00%, with guidance in focus, given expectations for further hikes ahead.

More on currencies in our dedicated section: Forex Trading News & Analysis