Why Did US Stocks Rise After the Democratic Landslide?
On November 4, 2026, the Democratic Party took both the Senate and the House of Representatives. The Dow Jones Industrial Average (Dow) rose 3.0%, the S&P 500 rose 1.6%, and the Nasdaq rose 1.4%.
✦ November 4 Market Snapshot
How the major numbers moved
Bitcoin and Ethereum slid right after the election, then bounced back. The meme coin and the listed companies carrying Trump's name fell.
President Donald Trump stays in office, but control of Congress has moved to the Democrats. Making laws and passing the federal budget both need Congress to sign off, so the Trump administration's policies will face stronger checks than before.
The market started recalculating how likely changes are in tariff, fiscal, and energy policy.
The biggest driver lifting stocks that day was the Iran war and global oil prices.
With the Democrats controlling Congress, the administration's military action and war spending would hit the brakes, so expectations grew that the United States and Iran could negotiate.
With the outlook that worries about the oil supply could ease, Brent crude fell 8.7% in a single day to $94.62 a barrel. The United States 10-year Treasury yield also slipped to around 4.9%, which steadied things.
By sector, hospital operators and discount retailers were strong. The reason is the hope that the Democrats can reverse the cuts to health insurance and food assistance budgets.
Solar and wind companies also rose on the outlook that federal support would continue.
✦ How Sectors Reacted
Winners and losers
Oil-related companies and defense stocks, which had been running well lately, fell.
AI-related stocks split. Microsoft, Amazon, and Alphabet rose, but data center operators like Hut 8 and IREN and chip stocks like Nvidia fell.
The reason is worry that data center permits and projects could slow down if the Democrats tighten power and environmental rules. Big tech like Microsoft has revenue streams beyond data centers, and that stood out, so those shares held steady.
Why Did Bitcoin and Ethereum Plunge, Then Bounce Back?
The crypto market started falling once the election result was known. People worried that the deregulation and rule-building the Trump administration had been pushing could be delayed now that the Democrats hold Congress.
On top of that, Trump is tied to the crypto market personally through his "Official Trump" coin. Maybe that's why Bitcoin (BTC) slid below $76,000 intraday, a six-week low.
But Bitcoin and Ethereum (ETH) cut their losses quickly. Bitcoin recovered from below $76,000 to above $78,000.
At that point, Reuters data showed Bitcoin at $78,354 (+0.7%) and Ethereum at $2,323 (+1.4%).
✦ Bitcoin and Ethereum
Dip first, bounce after
We should look at the legislation too. The market-structure bill the industry was counting on, the Clarity Act (Digital Asset Market Clarity Act), failed to get the 60 votes needed to move to the next step in the Senate on September 15, before the election.
The bill had already stalled once, and now that the Democrats hold Congress too, reviving it means negotiating with them. The Democrats have also questioned the conflict of interest between the Trump family's crypto businesses and government policy.
✦ Where Did Crypto's Election Money Go?
From PACs to Fairshake
Some market participants said that once the result was settled, uncertainty shrank and investors were willing to take on risk again.
The notional value of Bitcoin options block trades at the time was about $660 million, more than double the day before. Call option buying was about $420 million and selling was about $105 million. A call option is the right to buy Bitcoin at a set price.
Those figures are the notional value of option contracts, which is a different measure from the amount spent buying spot Bitcoin.
Goodbye, Official Trump?
While Bitcoin and Ethereum bounced, Official Trump (TRUMP), the meme coin carrying Trump's name, fell on November 4. The close went from $1.586 on November 3 to $1.270 on November 4, a plunge of about 19.9% on a closing basis.
TRUMP isn't the base asset of its own network. It's a meme coin issued on Solana. A Trump-related entity put out the token in January 2025, and it puts Trump's name and image front and center.
Unlike Bitcoin and Ethereum, it's a token wearing one person's brand, and that's both its strength and its weakness. It swings far too much on what one person, Trump, says or does.
Anyway, it looks like a rough road ahead for Official Trump coin holders.
Trump Family-Linked Stocks Fell Too
Listed companies tied to Trump took a hit this time too. The ties vary: some have him as a direct shareholder, some have family in management, and some are linked through a business partnership or a parent company.
Take Trump Media (DJT), the operator of Truth Social. In a filing with the United States Securities and Exchange Commission (SEC) submitted on November 2, the Donald J.
Trump Revocable Trust held 114.75 million shares, about 41% of the shares outstanding at the time.
The trust's sole trustee is Donald Trump Jr.
American Bitcoin (ABTC) is a Bitcoin mining and holding company. Eric Trump is a co-founder and chief strategy officer, and Donald Trump Jr. is a senior adviser. The listed company Hut 8 holds the majority stake in the company.
So the Trump family sits in management, while Hut 8 holds the majority of the shares.
AI Financial (AIFC) is a fintech company that used to be ALT5 Sigma Corporation, and Hut 8 (HUT) is the listed parent that holds the majority stake in American Bitcoin.
✦ Four Stocks Compared
November 3 vs. November 4 closes
Compare the regular-session closes in the United States on November 3 and November 4, and all four companies fell.
Investing in stocks that swing this hard on one person's reputation or standing is scary. Let's see how Trump handles this crisis.
The US Market Flipped in One Day. Why the Plunge?
Things looked fine on November 4... but on November 5 the US market gave back the previous day's gains and plunged. As I write this, the Nasdaq is down 5.0%, the S&P 500 is down 3.2%, and the Dow is down 1,146 points (2.1%).
✦ November 5 Intraday Plunge
Declines at the time of writing
The headline reason is the obvious one... the doubt about whether AI spending can be turned into real profit.
Building data centers and securing GPUs and power equipment takes enormous money, and the market keeps asking, more and more sharply, whether AI service revenue and cash flow can keep pace.
The bigger the spending, the bigger the borrowing cost, and if data center construction slips, the payback gets pushed back too.
On top of that came worry that the Democrats taking Congress will mean tougher review of data center construction and permits. And local residents in the United States are getting louder in opposing data center construction these days, right?
The Financial Times analyzed RegLayer data and found that more than 47 large data center projects in the United States this year have been delayed, withdrawn, or blocked.
UBS also estimated that potential construction halts could affect about 30% of the data center capacity planned to be added in the United States in 2028.
When data center projects get delayed, the growth outlook shakes not just for operators but also for the companies supplying server chips and power equipment.
✦ Qualcomm at a Glance
Weak handset sales, lower stock
Chip stocks also carried company-specific earnings pressure on top of that. Qualcomm fell about 9% in premarket trading on weak smartphone chip sales and disappointment with its outlook.
Handset segment revenue fell 26% from a year earlier to $5.14 billion, and chip segment revenue also dropped 8% to $9.02 billion. Even as it builds its AI data center business, weakness in the existing smartphone business weighed on earnings right away.
The selling wasn't limited to Qualcomm. Nvidia, AMD, and CoreWeave all fell sharply.
So were the people who warned that "the AI bubble is about to burst" right after all? Or is this just a pause before it takes off again? I'd guess every investor is torn right now.
This isn't investment advice. You know that, right? Let's each protect our own hard-earned money.
That's all for this post. See you next time.
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🌐 Korean version: 미국 중간선거 민주당 압승! 그리고 오늘 나스닥이 급락하는 이유에 대하여...
🌐 Japanese version: 米中間選挙で民主党が圧勝！今日ナスダックが急落する理由
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