US stocks closed sharply higher on Wednesday, with the Dow Industrial Average leading the way with a 3.03% gain. The S&P 500, Nasdaq Composite and Russell 2000 also advanced, but the Nasdaq 100 lagged as selling in Nvidia and AI infrastructure stocks limited the upside.
The rally followed the Democrats’ election victory in both chambers of Congress. Lower Treasury yields, a weaker dollar and falling oil provided a more supportive backdrop for equity buyers as markets assessed the implications of divided government.
The buyers showed up across much of the market. However, there was a clear dividing line within technology. Microsoft, Amazon and Apple posted strong gains, while a number of companies supplying the AI buildout moved sharply lower.
US closing levels
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Dow Industrial Average rose 1,570.14 points, or 3.03%, to 53,362.33.
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S&P 500 rose 119.75 points, or 1.58%, to 7,688.67.
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Nasdaq Composite rose 364.50 points, or 1.44%, to 25,736.51.
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Russell 2000 rose 44.51 points, or 1.58%, to 2,856.96.
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Nasdaq 100 rose 256.90 points, or 0.91%, to 28,437.17.
Market breadth gives the rally more credibility
The gains were supported by broad participation.
In the Dow, 27 stocks advanced and only three declined. S&P 500 advancers outnumbered decliners by 374 to 111, while the Nasdaq recorded 2,022 advancing stocks against 1,202 declining stocks. On the NYSE, the split was 1,301 to 492.
That matters. A rally has a stronger foundation when buyers are participating across a wider group of stocks. Today’s advance reached beyond a handful of heavily weighted technology names.
The Dow’s outperformance and the Russell 2000’s 1.58% gain added to that message. Buyers were making a play across different parts of the market.
Dow gainers: 3M leads a broad advance
The Dow’s 1,570-point rally had broad support, with 27 of its 30 stocks closing higher. 3M led the percentage gainers, while Microsoft, Sherwin-Williams, Home Depot and McDonald’s each advanced more than 6%.
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3M: +9.55% to $193.95.
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Microsoft: +6.68% to $555.80.
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Sherwin-Williams: +6.64% to $363.50.
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Home Depot: +6.53% to $355.44.
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McDonald’s: +6.53% to $280.22.
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Amazon: +6.12% to $266.03.
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Apple: +5.31% to $349.51.
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Nike: +5.21% to $40.49.
The leadership stretched across industrials, technology, home improvement and consumer names. That breadth gave the Dow’s advance more credibility, with buyers making a play across a wide range of businesses.
Magnificent Seven: Five rise, two fall
Microsoft and Amazon led the gains among the Magnificent Seven, with Apple also advancing more than 5%.
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Microsoft: +6.68% to $555.80.
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Amazon: +6.12% to $266.03.
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Apple: +5.31% to $349.51.
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Alphabet: +3.18% to $288.93.
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Meta Platforms: +1.44% to $630.00.
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Nvidia: −3.12% to $200.24.
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Tesla: −3.34% to $385.19.
The split is important. A higher Nasdaq does not mean every major technology stock is attracting buyers. Nvidia and Tesla moved against the broader market as both lost a friend in the GOP, leaving the Nasdaq 100 trailing the other major indices.
AI infrastructure remains under pressure
Several stocks tied to data centers, networking, power equipment and semiconductors suffered substantial declines.
Investors weighed whether tighter restrictions could slow data center expansion. A slower buildout could reduce spending demands on large technology companies while creating headwinds for suppliers dependent on that investment. That helps explain the different reactions within the AI trade.
Among the notable decliners:
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Vertiv: −12.89% to $205.55.
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Eaton: −9.99% to $352.56.
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CoreWeave: −9.90% to $48.42.
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Ciena: −9.69% to $271.00.
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Credo Technology: −9.55% to $136.50.
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GE Vernova: −9.30% to $832.82.
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Dell Technologies: −9.06% to $371.41.
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SanDisk: −7.91% to $1,037.40.
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Lumentum: −7.86% to $626.71.
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Marvell: −7.08% to $159.80.
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Micron: −7.00% to $795.23.
Elsewhere, Datadog fell 14.42% to $188.72, while CVS Health declined 12.54% to $79.95.
For traders in those stocks, the broader rally did little to relieve the selling pressure. The burden remains on buyers to show that they can stabilize their own stocks and sustain a recovery.
Winners extend across several industries
The list of gainers included payments, biotechnology, travel, retail, industrials and medical technology.
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Block: +15.26% to $87.60.
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Moderna: +13.11% to $258.38.
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Lyft: +12.42% to $18.74.
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AppLovin: +10.69% to $271.75.
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Newmont: +9.94% to $118.15.
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Booking Holdings: +9.83% to $170.97.
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Dollar Tree: +9.64% to $147.00.
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3M: +9.57% to $193.99.
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Stryker: +9.41% to $339.77.
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Intuitive Surgical: +9.38% to $482.10.
Travel and consumer names also participated, with Alaska Air gaining 8.75%, DoorDash rising 8.33% and Best Buy advancing 8.00%. Barrick Mining added 8.37%, joining Newmont among the stronger performers.
Trading lesson: Use the index as a barometer
Today was a good reminder that the broader market provides context, but each stock still needs its own trading plan.
The Dow rose more than 3%. Nvidia fell more than 3%. Microsoft gained nearly 7%, while Vertiv lost nearly 13%.
Those are very different outcomes within the same session.
Use the index as a barometer for market sentiment. Then use the individual stock’s support, resistance and moving averages to define bias, risk and targets. A strong market can provide a tailwind, but buyers still need to get above their own technical hurdles—and stay above them.
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This article was written by Greg Michalowski at investinglive.com.