The S&P 500 (SPY) rose 1.7% after Decision Desk HQ projected Democrats will control both the House and Senate following Tuesday's midterms, a result that lifted rate-cut expectations and sharply reduced hedging demand even as it triggered a GOP leadership shakeup and fresh questions over defense policy.

The election outcome dominated price action across assets. The 2-year Treasury yield fell to a two-month low near 4.55%, the dollar weakened, and gold and silver rallied alongside a sharp options-positioning shift, with net S&P 500 gamma exposure flipping from roughly -$625m to +$455m. Crude oil collapsed on easing Hormuz tensions, with WTI settling at $88.12, down $7.97, or 8.3%, and Brent falling near 10% to around $93 a barrel; a weekly EIA report showed crude inventories fell 865,000 barrels, less than the roughly 1.9 million drawn the prior week. ADP reported private payrolls rose 86,000 in October, above the 67,000 expected. Politically, Mike Johnson said he will not seek another term as House GOP leader, setting up a contest between Steve Scalise and Jim Jordan, while Florida Governor Ron DeSantis called the losses "close to an extinction-level event" for Republicans nationally. Trump said he will work with Democrats and will not replace Defense Secretary Hegseth, even as Polymarket priced a 67% chance of Hegseth's exit by year-end, up from 36%.

Sector performance split sharply along oil's collapse. Energy (XLE) tumbled 4.9%, with Marathon Petroleum, SM Energy and Devon Energy among the sector's worst performers. Consumer Discretionary (XLY) led gainers at +4.3%, powered by homebuilders and travel names, Lyft, Expedia and Booking Holdings each up more than 9%, while Tesla fell 3.6%. Financials (XLF) gained 3.5%, led by Blackstone and Prudential Financial, though Unum Group dropped 17.8% on a group-disability earnings miss. Real Estate (XLRE) rose 3.3%, Consumer Staples (XLP) 3.4%, Health Care (XLV) 3.1% even as CVS Health fell, and Materials (XLB) gained 2.5% behind Mosaic and Trex despite Mosaic's wider-than-expected loss. Technology (XLK) was roughly flat as Microsoft and Apple rallied but semiconductor names, Micron, Seagate and Lam Research among them, sold off. Industrials (XLI) fell 1.2%, pressured by defense stocks, Lockheed Martin, Northrop Grumman and RTX all down more than 4%. Gold miners surged, with GDXJ up 9.5% and GDX up 9.0%, and silver topped $52 an ounce.

Company News

• Block jumped after reaching a deferred-prosecution agreement with the Department of Justice over its money-laundering compliance program, a three-year deferral, alongside a raised full-year gross profit and EPS outlook.
• AMD shares advanced after record quarterly revenue of $13.4bn, up 45% year-over-year, with fourth-quarter guidance near $17bn.
• Datadog fell sharply despite beating on both revenue and EPS, as fourth-quarter guidance disappointed.
• Fidelity National Information Services dropped after narrowing guidance and pausing buybacks and tuck-in M&A to accelerate deleveraging.
• CVS Health rose after raising full-year guidance and announcing plans to split into two publicly traded companies, one retaining the CVS Health name under Aetna and Caremark, the other a roughly 9,000-store pharmacy business led by Prem Shah.
• Skyworks Solutions was the session's steepest decliner, extending a post-earnings slide.
• 3M rose after agreeing to a $7.35bn PFAS settlement covering about 99% of personal-injury claims tied to firefighting foam litigation.
• Stanley Black & Decker, W.W. Grainger and Expedia Group all raised full-year guidance after beating earnings estimates.

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