US Stock Market Trends (November 5): Democrats Sweep Congress, Dow Surges 1,569 Points, AppLovin Gains ~21% After Hours

Author: Chaoxiang Research

The Democratic Party secured control of both the Senate and the House of Representatives, resolving election uncertainty. The Dow Jones Industrial Average surged by 1,569.40 points, posting its largest single-day gain since April 2025.

Oil prices fell over 8% in a single day, while Apple and Microsoft hit record highs; Nvidia and CoreWeave, along with other AI infrastructure stocks, weakened amid concerns over data center regulations.

In after-hours trading, AppLovin soared roughly 21% on guidance that beat expectations, while Qualcomm dipped about 7% due to weaker guidance.

Dow Surges 3%, Regains Hold Above 53,000 Points

On Wednesday, the Dow climbed 1,569.40 points, gaining 3.03% to close at 53,356.12, marking its first time closing above 53,000 since September 8.

The S&P 500 rose 1.58% to close at 7,688.62; the Nasdaq gained 1.44% to close at 25,736.51.

Market participants believe that legislative gridlock resulting from divided government has historically been favorable for equities. Trump also stated his willingness to accept the election results and cooperate with the Democratic Party.

Funds Rotate from AI Infrastructure to Big Tech and Defensive Sectors

Apple briefly surged around 6% during trading to set a historical high of $354.33, pushing its market capitalization past $5.12 trillion. Microsoft also reached new all-time highs.

The prevailing market logic suggests that a slowdown in data center construction will help ease pricing pressure for memory chips, with Apple viewed as a beneficiary.

Intraday, Amazon rallied nearly 7% and Alphabet climbed about 5%. The Communication Services ETF (XLC) jumped close to 4%, while the Consumer Staples ETF (XLP) hit record highs.

Bank of America gained around 4%, and Walmart rose approximately 3%.

On the flip side, Nvidia closed down roughly 3%. CoreWeave fell over 7% intraday, Nebius declined more than 4%, and the Neocloud ETF (NCLD) dropped about 6% at one point.

CoreWeave's five-year CDS spread widened to 1,139.7 basis points, and the yield on its bonds maturing in 2031 climbed to 15.919%.

Renewable energy and healthcare stocks strengthened. First Solar rose 8.5% in premarket trading, HCA Healthcare gained roughly 7%, while Trump Media & Technology Group fell about 11% premarket.

AppLovin Surges After Hours, Qualcomm Guidance Falls Short

AppLovin reported third-quarter revenue of $2.18 billion, up 55% year over year, beating expectations of $2.08 billion; earnings per share came in at $4.30, surpassing the forecast of $4.04.

The company projected fourth-quarter revenue of $2.37 billion to $2.4 billion, above Wall Street's estimate of $2.25 billion, and increased its buyback authorization by $3.2 billion. Shares climbed approximately 21% in after-hours trading to $328.05.

Qualcomm posted adjusted EPS of $2.17 for the fourth fiscal quarter, with revenue of $10.44 billion, both slightly exceeding expectations.

However, the company's guidance for next quarter's EPS was $2.15 to $2.35, with a midpoint below the expected $2.27. Mobile chip revenue fell 26% year over year to $5.14 billion, as rising storage prices are dampening smartphone demand.

Qualcomm expects data center revenue to reach $5 billion in FY2027, while automotive business revenue grew 89% year over year to $1.99 billion. Shares fell about 7% in after-hours trading to $160.98.

Arm reported second-quarter revenue of $1.44 billion and EPS of $0.52, both beating estimates, but next-quarter guidance only slightly topped forecasts, sending shares down nearly 4% in after-hours trading.

Coherent delivered results and guidance that beat expectations, jumping roughly 5% post-market. Zillow fell about 15% in after-hours trading, while Cava declined approximately 13%.

Democrats Sweep Congress, Texas Governorship Changes Hands

The Democratic Party secured majorities in both the House of Representatives and the Senate in the midterm elections, while also winning key gubernatorial races such as in Texas.

Texas's newly elected Governor Gina Hinojosa had pledged to immediately halt data center construction in the state. According to Wells Fargo estimates, Texas accounts for roughly 27% of U.S. data center capacity (in gigawatts).

Analysts at Compass Point expect Elizabeth Warren to become chair of the Senate Banking Committee, potentially stalling crypto legislation like the Clarity Act.

Oil Prices Plunge, U.S. Treasury Yields Retreat

WTI crude oil futures tumbled more than 8%, settling at $88.12 per barrel. Brent crude fell approximately 8%, dipping to around $95 per barrel.

VP JD Vance blamed the Republican electoral defeat on the Iran war, leading markets to bet that pressure to end the conflict will increase.

U.S. Treasury yields fell. The 10-year yield dropped 8.8 basis points to 4.886%, while the 2-year yield decreased 5.6 basis points to 4.58%. The dollar index weakened.

Spot gold rose approximately 2.9% in early European trading to $4,043 per ounce. Bitcoin briefly dipped near $75,000 before rebounding to around $80,000.

In economic data, October ADP private sector payrolls added 86,000 jobs, surpassing the forecast of 75,000. The October ISM Services PMI fell to 54.5, slightly below the expected 54.8; the prices paid index stood at 73.0, remaining elevated.

What to Watch Today

All times are Beijing Time.

Stock Index Futures: As of 08:00 Beijing Time today, S&P 500 futures were flat, while Nasdaq 100 futures fell 0.16%.

21:30: U.S. Initial Jobless Claims. The Challenger layoff report will also be released today.

Tonight Pre-market: ConocoPhillips, Tapestry, and Kimberly-Clark will report earnings.

Friday Morning (U.S. Post-Market): Airbnb and Akamai will release earnings.

Friday 21:30: U.S. October Non-Farm Payrolls Report. Markets expect the Federal Reserve to raise interest rates again in December.