The stock market rose sharply on Wednesday after Democrats won the 2026 midterm elections decisively. CNBC reported that the rally also reflected Trump's response to the results.
Trump told The New York Times and The Wall Street Journal overnight Tuesday that he accepted the results and would work with Democrats. Stock market futures rebounded alongside those reports.
Thomas Hempell, senior economist at Generali Investments, said Trump's acknowledgement and openness to working with the opposition "have helped markets to rally on hopes that contestation of the results and more adverse polarization can be avoided."
Before the midterms, some on Wall Street worried that Trump might contest the results. CNBC's Fed Survey found that 63% of 30 fund managers, strategists and economists viewed the extended uncertainty from legal challenges as posing "some" market risk, up from 61% in September. Another 14% called it "significant" risk, up from 7%.
George Saravelos, head of FX Research at Deutsche Bank, said Trump's acceptance of the results could "act as a break on extreme policy outcomes and bring down risk premia," provided the president's position holds.
Jay Woods of Freedom Capital Markets said the rebound was partly due to Trump's "initial tone and reaction to the results." He said the key question is whether that stance lasts. Woods also cited inflation concerns tied to higher energy prices from the conflict in the Middle East as ongoing headwinds.
Philip Blancato of Osaic said the market could have a "very strong" end to the year if Trump "continues to play nice" with Democrats. He said reaching 8,000 on the S&P 500 by year-end is not out of the question.
The S&P 500 gained more than 1% on Wednesday, according to the report.