A day after one of the most tumultuous mid-term elections in recent memory, investors emerged in a buying mood, pushing both the Dow Jones Industrial Average and the S&P 500 Index up more than 2%.
The 2018 mid-term election campaign was one riven by a bitter partisan divide. Once the votes were tallied, Democrats retook the House of Representatives while Republicans strengthened their hold on the Senate. Wall Street seemed to take to a Congress split between parties, with most stocks on U.S. exchanges rallying the day after Election Day.
U.S. market indexes rallied on the news, with the Dow and S&P 500 both gaining 2.1% Wednesday, while the Nasdaq Composite gained 2.6%. In contrast to Red October, when investors fled riskier growth stocks like tech giants in favor of a handful of defensive sectors like retail and consumer goods, the post-election rally was strongest in tech, finance and even recently listed cannabis stocks.
Among financial-services stocks, MasterCard gained 4.6%, while Visa rose 2.8% and PayPal rose 4.2%. Amazon, one of the most beaten-down tech stocks in the past month, gained 6.9% today. Apple rose 3%, Google 3.6%, Microsoft 4% and Netflix 5.4%.
Some of the more actively traded cannabis stocks had their strongest days in a while. Tilray gained 31%, while Canopy Group rose 8.2% and Aurora Cannabis advanced 9.2%.
Not only did Michigan become the tenth state, and first state in the Midwest, to legalize recreational cannabis sales, but U.S. Attorney General Jeff Sessions resigned Wednesday at the request of President Trump. That alleviated some concern among investors in cannabis stocks that the Justice Department would counter local referendums that made pot legal in certain states.
Health-care stocks also rallied amid expectations that significant changes to the U.S. health system, which could harm their profits, were reduced after the mid-term elections. Pfizer rose 3.2%, while Merck gained 2.4% and UnitedHealth Group was up 4.2%.