November 4th Market Overview: The Dow Had Its Best Day Since April 2025

Happy Wednesday

How the heck is it already the 4th?

Dems took the House and Senate last night, and by the close Wall Street had decided a split government suits it fine (more than fine, judging by the Dow). Starting in January, Democrats can pass bills and President Trump can veto them. That means very little changes in a hurry, which is about the nicest thing markets ever hear from Washington.

Let's dig in...

Today's Big Picture

1. The Dow Had Its Best Day Since April 2025
   
   The rally that started when President Trump said he’d accept the results held all day. The Dow closed back above 53,000 for the first time since Sept. 8, and Wall Street’s fear gauge, the VIX, fell below 17. Dow Jones Market Data says stocks have finished higher a year after every midterm since 1942.
   

2. Voters Turned on Data Centers, and the Tech Giants Won 
   Voters sided against data centers in 40 of 41 local ballot measures, by CNBC’s count. Texas, home to more than a quarter of planned U.S. data center capacity, elected a governor who promised to halt new construction. Companies that rent out AI chips, like CoreWeave $CRWV, fell along with the chipmakers. Microsoft $MSFT hit a record anyway, since existing data centers are worth more when new ones get harder to build.
   

3. Oil Had Its Worst Day Since April 
   U.S. crude settled at $88.12 as traders bet on peace talks, after Vice President JD Vance blamed the Iran war for Republican losses. That’s $16 off in three sessions, and international crude closed under $100 for the first time in over a month. Gasoline futures were on track for their lowest close since March 10.

Market Overview

Index Performance

Stock spotlight

Duolingo $DUOL ( ▲ 26.08% )  
said 64.9 million people used its app every day last quarter, and paying subscribers reached 13.1 million. The stock won back nearly all of this year’s losses in one session.

CVS Health $CVS ( ▼ 12.58% )  
will split its roughly 9,000 pharmacies from Aetna and its Caremark drug-benefits arm by early 2028. Shares rose after hours on Tuesday’s first report, then had their worst day since January once the plan was official.

3M $MMM ( ▲ 9.39% )  
will pay $7.4 billion over nine years to settle claims tied to forever chemicals in firefighting foam. UBS said investors had braced for a bill closer to $10 billion.

Fidelity National Information Services $FIS ( ▼ 23.67% )  
, which runs software for banks, cut its outlook after big bank clients delayed switching systems. It also paused buybacks and acquisitions to pay down debt, and the stock fell to its lowest since 2012.

Big name updates

Apple $AAPL ( ▲ 6.0% )  
touched a record $354.33, pushing its market value past $5.1 trillion. Evercore thinks fewer new data centers could cool memory chip prices, the cost Apple blamed for its softer margin outlook this week.

Tesla $TSLA ( ▼ 3.3% )  
fell after Elon Musk’s record midterm spending backfired, including $224 million in Texas, where his picks for governor and Senate both lost. Musk joked on X that his “election-interfering space lasers” didn’t work this time.

McDonald’s $MCD ( ▲ 6.53% )  
saw sales at existing U.S. restaurants dip for the first time in six quarters, though by less than feared. CEO Chris Kempczinski said menu prices need to rise a bit to cover inflation without scaring off bargain hunters.

Uber $UBER ( ▲ 4.91% )  
beat third-quarter estimates but forecast fourth-quarter profit below Wall Street’s target, blaming high fuel prices and the Middle East. The stock rose anyway as oil fell.

Other notable company news

Lennar $LEN ( ▲ 7.09% )  
and PulteGroup $PHM were among the S&P 500’s best performers on bets the election makes housing affordability a priority.

HCA Healthcare $HCA ( ▲ 10.34% )  
led hospital stocks higher on bets that a Democratic Congress pushes for more Obamacare spending.

Lockheed Martin $LMT ( ▼ 6.7% )  
fell with other defense stocks on worries that a split government makes bigger defense budgets harder to pass.

Caterpillar $CAT ( ▼ 5.24% )  
fell with the companies that sell engines and turbines to power data centers.

Freeport-McMoRan $FCX ( ▲ 1.34% )  
will spend $4.5 billion to more than double copper output at its mine in Bagdad, Arizona. It says the project breaks even at $4 copper, and copper trades near $6.40 a pound.

Kraft Heinz $KHC ( ▲ 4.73% )  
will raise prices across its brands in 2027, and CEO Steve Cahillane said cost pressure is showing up everywhere.

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Sector Watch

Bond market

Treasury yields fell, and the 2-year hit its lowest level since early September. Traders now expect less inflation a year from now than they did Tuesday, and the dollar slipped against most major currencies.

Policy watch

The new Congress

Democrats are on track for at least 54 Senate seats and at least 250 House seats when the new Congress starts in January. President Trump told CNBC he can work with them on “many more things than people understand.”

Democratic leaders have already named their first targets:

• Ron Wyden, the likely next Senate Finance chair, wants a billionaire tax, wider healthcare coverage and more control over trade.

• Chuck Schumer says Democrats will investigate companies tied to the administration. Hakeem Jeffries, the likely next House speaker, says there’s no target list yet.

• Drugmakers will likely face hearings on the pricing deals Trump struck with 27 drug companies.

• Elizabeth Warren is expected to chair Senate Banking, where Compass Point expects crypto bills like the Clarity Act to stall.

International

Trump agreed the Iran war hurt Republicans but said he’d make the same call again, pinning the damage on oil prices. Schumer says Democrats will end the war with help from some Republicans. A president keeps wide room on foreign policy, though, so the timing is still mostly Trump’s call.

What to Watch

Whether Oil Stays Under $90

WSJ’s Carol Ryan says energy traders see fair value for oil around $90, and U.S. crude already closed below it. I think it takes real peace talks with Iran to push prices much lower from here. Wells Fargo says the war is still squeezing fuel supplies.

CoreWeave’s Debt Insurance

The price of insuring CoreWeave’s debt against default climbed to about 1,140 on the five-year contract. Bond traders generally read anything above 1,000 as distress. If that number keeps rising, lenders see the data center slowdown as a debt problem too.

Thanks for reading - you are now the more informed 🙂

- John

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