Stock markets poised for a rally after U.S. midterm election

Stock market futures in both Canada and the U.S. surged Wednesday after the U.S. midterm election yielded Democratic majorities in both houses of Congress. Investors parsed the potential impact on artificial intelligence, the defence and wind energy sectors, as well as Big Oil. The results usher in a new era of congressional resistance to the agenda aggressively pursued by U.S. President Donald Trump. One overarching theme was that divided government might not be such a bad thing.Markets generally prefer that control of Washington be split between Republicans and Democrats. That is seen as offering less risk of sweeping policy changes that could upend the economy.“The magnitude of the gains for the Democrats in the midterms does not change too much for the near-term policy outlook, given the party still lacks a filibuster-proof majority in the Senate and President Trump has veto power to block legislation,” Stephen Brown of Capital Economics said in an analysis. Story continues below advertisement Some Asian markets briefly retreated amid concerns that the Democrats might slow the buildout of AI because of safety concerns and local resistance to data centres. Investors have questio...