The market is up again

The US stock market rose sharply after the US midterm election, which was the largest surge since 1982. Both the Dow Jones Industrial Average and S&P 500 surged 4.3 percent and 3.9 percent. How is the US stock market related to the midterm election?

The Democratic party controls the House now, but still has not managed to take the control of the Senate. The US stock market seems to favour both political parties. Do people still remember what happened to the US stock market after Donald Trump won the 2016 presidential election? The US stock market dropped during the pre-market period but rose sharply once the market opened. The reason given to the market response after the US presidential election is that the market loved Trump's proposed tax policy. However, this time the Democratic party controls the House, it could mean that the Democratic party can block Trump's proposed aggressive stimulus fiscal policy. Based on the reason given to the market rise after the presidential election, today's market surge does not make much sense. The Democratic party is a left-wing party, comparing with the Republican party. The Democratic party prefers the ideology of social equality, and taxing wealthier people and companies; the ideology of the Democratic party should not be preferred by the US stock market.

Therefore, the stock market does not really love any particular political ideology, unless the ideology creates actual impacts on the financial market. The investors merely love news that could create some excitement in the financial market, and the news does not need to have any actual impact on the market, the market just loves the excitement.