Dow up 1.93% at the open, DAX up 2.13%: markets toast a Washington that can do less

The morning’s question was who won. By the afternoon, markets had answered a different one: how much can the winners actually do? The Dow Jones Industrial Average opened 997.76 points, or 1.93%, higher at 52,784.48 on Wednesday, the S&P 500 1.14% higher at 7,655.43 and the Nasdaq Composite 1.07% higher at 25,643.36¹. Reuters put the mood plainly: investors were betting that “a divided Washington” after the Democrats’ sweep of Congress could limit sharp policy shifts¹.

Frankfurt had already started. At 15:41 CET the DAX was 2.13% higher at 26,416.42 points, after opening at 25,888.93 and touching a low of 25,876.82². Since Monday the index is up 2.38%, and since January 7.65%². The day’s best performers were not election trades at all: Heidelberg Materials was up 9.96% and Continental 5.98%, both on quarterly figures, with Commerzbank up 5.95%². At the bottom sat Siemens Energy, down 4.22% at €124.30².

Inside the rally, a sorting. Before New York opened, the shares that had needed one side to win were already moving. Data-centre operators slipped on the prospect of tougher congressional oversight of the AI build-out; defence names such as Northrop Grumman fell 5% on doubts that a $1.5 trillion budget request will pass untouched; prison operators GEO Group and CoreCivic lost 6.7% and 5.2%³. Solar and wind companies rose, and hospital operators and health insurers gained³. Analysts quoted by Reuters doubted that any legislation could meaningfully stall data-centre construction; what changes is the prospect of more hearings³.

That is the useful lesson for you. A headline index going up does not mean everything went up; it means the arithmetic of gains beat the arithmetic of losses for one morning. Gridlock is not a policy, but markets have long treated it as a kind of insurance: fewer surprises, more paperwork. The first test is the close, and the second is the first invoice from a congressional committee. Nothing here is investment advice.