The Dow Jones Industrial Average posted its strongest daily gain since April 8, after stocks initially fell sharply when Democrats won control of both the House and the Senate in the 2026 midterm elections. Technology stocks were hit first after a Democrat won the Texas governor's race on a pledge to halt new data center construction, but buying returned and small-cap stocks led the recovery. State Street SPDR Portfolio S&P 600 Small Cap ETF (SPSM) is up 17.6% this year, versus 12.4% for State Street SPDR S&P 500 ETF Trust (SPY), though the article notes that rebounds after past elections have not always lasted. The U.S. economy grew at an annualized 3.4% in the third quarter of 2026, with private domestic investment surging to 19.4% largely on AI infrastructure, while the NFIB Small Business Optimism Index fell to 97.9 in September 2026. Per WSJ data, the Russell 2000 trades at a P/E of 35.96 versus 34.60 a year earlier, above the Nasdaq 100 (29.92X) and S&P 500 (23.55), which the article says suggests small caps are overvalued.
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Democratic Partymidterm electionsETFSPY
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SPY
▲ Likely positiveSPDR S&P 500 ETF
Relevance: low
| Market | US stocks |
|---|---|
| Sector | ETF |
| Close on 11/04/2026 | 766.73 |
| Change that session | +1.64% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
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