By Hilary Russ and Rodrigo Campos
NEW YORK (Reuters) - Most major stock markets rose on Wednesday after the U.S. midterm election divided control of Congress, while expectations of political gridlock in Washington weighed on the dollar.
U.S. oil prices slipped after U.S. crude output hit another record high.
While gridlock could hamper President Donald Trump's political and economic agenda, few analysts expect a reversal of tax cuts and financial deregulation measures that have already been enacted.
That view helped all three Wall Street equity indices rally, with traders piling into technology and healthcare stocks. [.N]
"I think it is more just relief that the election has come and gone, no surprises, no tail-risk outcome occurred. Gridlock is fine, let's get on with things and worry about the fundamental issues like earnings, the (Federal Reserve)," said David Joy, chief market strategist at Ameriprise Financial in Boston.
Still, a split Congress could hamper Trump's push for a further round of tax cuts and deregulation, measures that have supercharged the U.S. economy, stock markets and the dollar.
The Dow Jones Industrial Average <.DJI> rose 423.38 points, or 1.65 percent, to 26,058.39, the S&P 500 <.SPX> gained 43.11 points, or 1.56 percent, to 2,798.56 and the Nasdaq Composite <.IXIC> added 152.67 points, or 2.07 percent, to 7,528.63.
The pan-European STOXX 600 index <.STOXX> rose 1.06 percent and MSCI's gauge of stocks across the globe <.MIWD00000PUS> gained 0.43 percent.
The U.S. Federal Reserve starts its two-day monetary policy meeting on Wednesday, and it is expected to keep interest rates unchanged. A rate hike in December is largely priced in.
"The policy path implied by this outcome shifts the narrative away from rising rates at least temporarily," Morgan Stanley's Michael Zezas wrote in a client note.
That view pushed the dollar lower against a basket of currencies. The dollar index <.DXY> fell 0.31 percent, with the euro
U.S. Treasury yields fell, but cut their decline after a record high amount of 30-year government bonds was met with weak demand.
Benchmark 10-year notes
Chinese shares closed 0.7 percent lower, while Hong Kong stocks ended up 0.1 percent. <.HSI> [EMRG/FRX]
The dollar's weakness lifted other currencies. The Japanese yen strengthened 0.04 percent versus the greenback at 113.40 per dollar, while sterling
The Mexican peso
The Mexican peso lost 0.84 percent versus the U.S. dollar, recently trading at 19.89.
U.S. oil prices continued a recent slide after domestic inventories rose more than expected, adding to over-supply concerns as U.S. crude output hit another record high. [O/R]
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)