The Dow Jones index surged 3.03% on Wednesday, 4 November, after Democrats won control of Congress in the midterm elections, while oil fell and chipmakers and data-centre developers retreated. The S&P 500 rose 1.58% at the close, and the broad market rose 1.81%, more than the index, with every covered share counted equally.

The election result sorted shares by industry. Hospital stocks rallied on the Democratic victory, while defense firms fell on fears of a tighter Pentagon budget. Apple (AAPL) rose 5.31%, its largest one-day gain since 12 May 2025, and Microsoft (MSFT) and Amazon (AMZN) gained with it. Consumer discretionary led the sectors, which shows the buying reached well past the companies the election touched directly.

The companies tied to AI spending went the other way. Chipmakers and data-centre developers fell after newly elected governors in some states promised to pause data-centre development. Semiconductor shares dropped 2.75%, and technology ended little changed even with Apple and Microsoft higher. On Faircurve's reading, the worry is that a pause in new data centres would slow the spending that has lifted the chipmakers this year.

What the day leaves open is whether the relief reaches far beyond the biggest companies. The size of the gain says little on its own. After the earlier gains at least this large, the S&P 500 was higher a month later in 188 of 286 cases, against 66% of all sessions. Where the buying sat says more, since 75% of shares rose and smaller companies led the largest by 1.95%. That is the pattern of a broad relief rally, not a lift carried by a few giants.

The question behind the selling in chips is whether the AI trade's leadership has run its course. The buying went to the shares that had lagged. The past year's leaders fell behind the past year's laggards by 6.32%, and low-beta shares led by 3.16% over high-beta shares, the ones that move most with the market. Technology's price already assumes less than analysts do. It needs 11% a year of earnings growth for five years, against the 17% analysts expect from the median company next year. That points to profit-taking in the year's leaders rather than a collapse in what technology is expected to earn.

Lower borrowing costs may have done as much as the election to lift shares. Rate-sensitive companies held up better than companies least sensitive to rates by 9.15%, the pattern of a day when yields fall. Lenders shared the relief. The high-yield spread narrowed 10 basis points on Faircurve's credit gauge, which reads spreads from bond-fund prices. The most indebted companies held up better than the least indebted by 1.68%, and the VIX fell 4.22 points to 16.61. On the evidence, rates were part of the story, and the credit market backs the stock market's relief.

Treasuries rallied alongside shares as the dollar slipped. The ten-year yield fell 5 basis points to 4.90% at the close. Oil plunged on the Iran war outlook, with Brent down 8.67% to $94.62 a barrel, and the energy producers fell with it. The ISM services index came in below its forecast, a mild sign of slower growth. Gold rose 3.37% with shares rather than against them, which points to the weaker dollar and lower yields rather than a flight to safety.

Europe joined the rally while Asia split. The DAX rose 3.16% and Germany's services PMI beat its forecast, even as euro-zone inflation rose to 4% in October, with energy inflation at 20.8%. The Nikkei 225 fell 1.42% in a session that ended before Wall Street opened, leaving Europe as the overseas market that traded alongside the US rally.

Faircurve's model reads the day as a relief rally that lifted the shares it flags as value traps furthest, ahead of the broad market. ConocoPhillips (COP) and EOG Resources (EOG) report on Thursday, the first test of what the oil slide means for the producers' earnings.

• HCA Healthcare (HCA) rose 10.34%, its largest one-day gain since 22 July 2022, as hospital stocks rallied on the Democratic victory. The model's fair value sits 9.3% above the price, evidence grade medium.

• Datadog (DDOG) fell 14.42% on the day its earnings of $0.81 a share beat the $0.64 estimate, leaving it down 32.22% over the week. The model's fair value sits 9.9% above the price, evidence grade medium.

• CVS Health (CVS) fell 12.53%, its largest one-day fall since 27 January 2026, on the day its earnings of $2.09 a share beat the $1.65 estimate.

• ARM Holdings (ARM) fell 5.28% in the session and slipped 1.41% in after-hours trading, with earnings of $0.52 a share ahead of the $0.48 estimate. The model sees its shares 20.1% above fair value, evidence grade medium.

The Bank of England decides at 7 a.m. New York time on Thursday, with economists expecting a rise to 4%, a test of how far Europe's inflation is pushing rates higher. US jobless claims follow at 8:30 a.m. on Thursday, a check on whether the softer services reading reaches hiring. Average hourly earnings arrive at 8:30 a.m. on Friday, forecast at 2.9% a year, and will show whether wage growth supports the odds of a December hike.

Eight of 11 sectors rose, led by consumer discretionary (+4.26%) while energy fell furthest (-4.74%), and technology's flat day leaves it down 7.59% on the week. The model finds the most value in technology, whose shares sit 5.0% below fair value at the median, in the model's opinion.

The day's biggest gains went to health care names such as HCA Healthcare (HCA) and Moderna (MRNA), as hospitals rallied on the election. Datadog (DDOG) and CVS Health (CVS) fell after their results. The model's fair value sits 21.2% above Vertiv Holdings' (VRT) price, evidence grade medium, as the model's opinion.

The real-economy themes led the growth themes by 5.08%, the same rotation the sectors show. Gold miners led every theme, up 9.01%, and oil and gas producers lagged, down 6.39% as crude slid. The high-beta themes split, with gold miners rising while semiconductors fell with the rest of the growth themes. The model sees oil and gas producers' shares 9.9% below fair value at the median, so the selling hit a theme the model already rates cheap.

CCC widening flag: Faircurve's credit gauge flags a widening in the lowest-rated tier: an implied move of about 152 bp over the last 20 sessions. The CCC-to-high-yield gap is 989 bp, wider than on every other day over three years.

The high-yield spread is in the top 23% of weeks over the past three years (high), rising for three weeks.

Lenders relaxed on the day, but the weakest end still shows strain: the CCC spread stays flagged as widening, and a CCC-rated borrower pays a yield near 18%. That cost falls first on the weakest companies that must refinance, so the high-yield market's calm rests on its stronger borrowers.

On Kalshi, the regulated exchange where traders bet on the decision, Wednesday 9 December carries a 79% chance of a quarter-point hike. The same market puts a hold at 20% and a quarter-point cut at 1%. The bills' yields climb from 4.01% at one month to 4.39% at a year against a fed funds rate of 3.88%, a rising path in line with those odds.