Nasdaq Gains 0.8% on Election Day as Chips Rebound and the Dow Falls

The Nasdaq Composite rose 0.8% on Election Day as beaten-down chip shares rebounded, even as the Dow Jones Industrial Average fell 0.4%.

The Nasdaq Composite rose 0.8% to close at 25,372.01. The S&P 500 rose 0.4%, up 27.52 points to 7,568.92. The Dow Jones Industrial Average fell 0.4% to close at 51,786.72. The Nasdaq's gain was its best midterm Election Day performance since 2010. The Dow's fall was its first midterm Election Day decline since 1990.

The split finish reversed Monday's pattern. On Monday, the Dow had held a gain while the Nasdaq and the S&P 500 fell. On Tuesday, technology led and the Dow lagged. For technology, the day was relief. For the Dow, it was a reminder. Voters were still casting ballots as the closing bell rang.

The tape

The indexes also finished below their best levels of the day. The S&P 500 had traded as high as 7,594.61, a session high, not a close. Breadth was soft underneath the gains. More S&P 500 stocks fell than rose in early trading. Late sectors were mixed, with a slight downside bias. Staples and materials were weakest, while technology and industrials outperformed.

"It looks like a bit of a relief rally after some pronounced selling pressure," said Adam Turnquist, chief cross-asset strategist at LPL Financial. The word relief does the work in that sentence. Buyers returned to the shares hit hardest in the recent selling. They did not lift the whole market.

The election framing cuts both ways, and it is framing, not fact. A Democratic sweep was seen as the likeliest outcome. Turnquist warned that scrutiny of AI data centers could pressure the big AI names after a sweep. He also said a post-midterm Big Tech sell-off would not change the AI thesis. He would view it as a buying opportunity.

Chips led the rebound

Chip and AI-infrastructure shares led the rebound after Monday's six-month closing low in the semiconductor index. The PHLX Semiconductor Index rose 2.32%, up 240.35 points, to close at 10,568.18. Its previous close was 10,328.33. Tuesday's gain was a rebound from that low, not a new high.

Nvidia was the strongest upward force on the S&P 500 on Tuesday. The chipmaker rose about 3% in afternoon snapshots, with one afternoon reading at 3.1%. CoreWeave, an AI cloud company, rose about 2.6% in the same afternoon vintage. Those are afternoon snapshots, not closing percentages for either stock.

Microsoft rose about 3% in late trading, and Amazon rose more than 2%. The two paced the Dow's upside in that late snapshot. AppLovin jumped nearly 7% in late trading as a top Nasdaq performer. Advanced Micro Devices rose ahead of its report after the close. The desk's separate AMD coverage follows that report.

Apple and Palantir capped the upside

Apple fell 1.90% at the regular-session close. The fall came even though Apple beat profit and revenue expectations for its latest quarter. The problem was the outlook, not the reported numbers. Apple warned that holiday-quarter margins face pressure from rising memory-chip costs. The desk covered Apple's results and that warning separately.

Palantir Technologies fell nearly 2% in late trading, an approximate snapshot. It also beat expectations, but new contract growth slowed. Shopify skidded nearly 8% in late trading. Its revenue and gross merchandise volume, the value of goods sold through its platform, missed expectations.

Sherwin-Williams fell just over 3% in late trading, the Dow's biggest lag there. DuPont de Nemours soared after its earnings beat, in the desk's separate coverage. Celanese climbed about 5% in afternoon trading. Winners and losers both came mostly from earnings, not the election.

Rates moved the other way

The Job Openings and Labor Turnover Survey, known as JOLTS, counted 7.523 million openings in September. That was a rise of 333,000 openings. Economists had expected about 7.1 million. A larger pool of unfilled jobs argues against a fast-cooling labor market. The desk published its own JOLTS coverage earlier Tuesday.

Treasury yields moved against the relief rally. The 10-year yield rose about five basis points to about 4.95% in late trading. A basis point is one hundredth of a percentage point. The 2-year yield stood at 4.61% in a market snapshot at 4:14 p.m. ET. Both yield figures are snapshots, not settlements.

Oil swung through a wide range. Brent crude climbed above $107 a barrel in the morning, then briefly dropped below $101. In an afternoon reading, Brent was down 0.9% at $103.80. West Texas Intermediate crude traded near $96.65 in late trading. Those are afternoon and late readings, not settlements.

What happens next

The first polls close at 6:00 p.m. ET, and results arrive through the night. In the closing coverage, tomorrow was called the real test of what the midterms mean for markets. Tuesday's rally was relief, priced before a single result was known. Tonight's returns will test whether that relief holds.

A heavy earnings slate was also due after the close. Advanced Micro Devices, Arista Networks, Super Micro Computer, Amgen and Booking Holdings were all scheduled to report. None of those results was known at the close, and none is reported here. Their numbers land into the election night.

Two dated tests follow the vote. The Treasury Department announces its quarterly refunding, its plan for government borrowing, on Wednesday, Nov. 4, at 8:30 a.m. ET. The October jobs report follows on Friday, Nov. 6, at 8:30 a.m. ET. By Friday, markets will have the election, the borrowing plan and the jobs data.