Oil prices crashed below $94 a barrel and gold surged to a record high on Thursday as global markets celebrated the Democrats’ sweeping midterm victory — and the prospect of an end to the unpopular war in Iran.
Key Points
- Brent crude fell below $94 a barrel, extending an almost 9% plunge, while WTI dropped more than 8% to $88.12.
- Gold ripped to about $4,150 an ounce, a record high.
- The Dow Jones jumped more than 1,570 points, about 3%, its best day since April 2025; the S&P 500 rose 1.6%.
- Asia split overnight: Hong Kong and Australia rallied, while South Korea’s chip-heavy Kospi sank almost 5%.
Wednesday’s session on Wall Street was emphatic. The Dow rose 3.03% to 53,356.12, the S&P 500 gained 1.58% to 7,688.62 and the Nasdaq Composite advanced 1.44% to 25,736.51. The VIX, Wall Street’s fear gauge, plunged 20.26% to 16.61. In London, the FTSE 100 climbed 1.79% to 10,829.21, while the German DAX finished unchanged.
The main driver was falling oil. Brent’s collapse from above $100 toward the mid-nineties rewrote the near-term inflation maths overnight, and WTI fell more than 8% to $88.12. The trigger was hope: with Democrats now in control of Congress and voters having punished the Iran war at the ballot box, the market assumes Washington has a stronger reason to look for a diplomatic solution rather than escalation. Trump said the US currently has no plans for military action, and Qatar has stepped up its mediation.
Asia splits as chips slump
Overnight, the picture was less tidy. Hong Kong’s Hang Seng jumped 3.09% and Australia’s ASX 200 rose 2.36%, with India’s Nifty up 1.70%. But South Korea’s Kospi slumped 4.63% to 5,420.77 after regulators moved to cool a frantic AI-linked rally, with trading sidecars — five-minute halts to program trading — triggered as chip names led the fall. Japan’s Nikkei lost 1.42% and Taiwan dropped 2.54%.
Nasdaq-100 futures slipped about 1.2% into Thursday, while S&P 500 futures were down about 0.3% and Dow futures up about 0.3% — a rotation, not a reversal, with money moving out of high-flying chip stocks and into the broader market.
The dollar edged lower, with the dollar index at 101.41 after a 0.36% decline in the prior session, as the election outcome eased fears of disputed results and lifted US Treasuries and global equities. The euro was up 0.12% at $1.1241 and sterling held near a seven-week high at $1.3462 ahead of the Bank of England’s decision. Bitcoin gained 0.60% to $80,660.
Jobs data adds to the picture
There was also good news on the US economy. The ADP National Employment Report showed US private payrolls rose by 86,000 jobs in October, above the 69,000 estimate of economists polled by Reuters. Markets are now pricing in an 81.2% chance of at least a 25-basis-point rate increase from the Federal Reserve at its December meeting, according to CME FedWatch, up from 77.4% in the prior session.
Falling oil is also changing the Fed debate. Citi argues that a lasting reopening of the Strait of Hormuz could turn the Fed from hikes to cuts — a reminder that the same peace hopes lifting stocks could, if realised, reshape the path of US interest rates.
What happens next
The S&P 500 has risen in the six months after every US midterm election since 1950, and investors will be watching whether that pattern holds again. But the new majority’s main bargaining chip could be a fight over the debt ceiling in 2027, which markets dislike, and analysts warn that divided government brings its own kind of uncertainty.
For now, though, the market’s verdict is clear: a decisive result, cheaper oil, and a record gold price have given investors plenty to cheer — even as Asia’s chip sell-off warns that not every corner of the rally will last.
Sources
- Reuters via Free Malaysia Today — https://www.freemalaysiatoday.com/category/business/2026/11/05/dollar-edges-lower-as-us-election-outcome-cheers-global-markets
- XTB morning brief — https://www.xtb.com/cy/market-analysis/news-and-research/what-drives-the-market-top-morning-news-november-5-2026
- Samuel & Co morning brief — https://www.samuelandcotrading.com/morning-market-brief-5-november-2026-oil-crash-gold-boe/