Blue Chips Pop On Blue Wave As Dow Surges 1,000 Points

The Dow Jones Industrial Average rose 1,009 points, or 1.9%, at Wednesday’s open, according to ABC News. The move came the morning after midterm results showed Democrats taking control of the U.S. House and Senate. ABC News put the S&P 500 and the NASDAQ Composite each up 1.1%. The rally followed a jittery week. The CBOE Volatility Index, Wall Street’s fear gauge, closed Tuesday at 20.83, up 3.31 points from a week earlier.

Small Caps Kept Pace as the Rally Spread

The gains grew after the opening bell. As of 9:43 AM ET, the SPDR Dow Jones Industrial Average ETF was up 2.41%, which suggests the rally had extended past ABC’s opening figure. At the same time, the iShares Russell 2000 ETF had risen 2.05%. That put it ahead of the SPDR S&P 500 ETF Trust at 1.64% and the Invesco QQQ Trust at 1.47%. The Invesco S&P 500 Equal Weight ETF was up 1.34%. With small caps keeping up with blue chips, the buying went well beyond the mega-caps.

Cloud Sellers Lead the Dow Higher

3M (NYSE:MMM | MMM Price Prediction) led the blue chips, up 7.71% as of 9:51 AM ET. The gain came hours after Bloomberg reported that 3M committed to settle PFAS-related claims. Amazon (NASDAQ:AMZN) was up 7.16% and Microsoft (NASDAQ:MSFT) was up 5.57% at the same time. As of 9:43 AM ET, Apple had gained 5.27% and Home Depot 4.53%.

Last week, Amazon and Microsoft both reported that AI spending is turning into revenue. Amazon Web Services revenue rose 39% to $45.98 billion in the third quarter, and Azure grew 48%. Microsoft management told analysts that “customer demand continues to exceed available supply.”

AI Hardware Suppliers Sit This One Out

The companies building that capacity moved the other way. Caterpillar (NYSE:CAT) was down 4.14% as of 9:51 AM ET, which extended its one-month slide to 29.09%. That decline comes despite a record $78 billion backlog, built partly on turbines and engines for data centers. NVIDIA was down 0.56% even as Microsoft, Apple and Amazon rose. As of 9:43 AM ET, Chevron was down 2.55%, with oil falling this week on hopes for U.S.-Iran diplomacy, per CNBC.

For regular investors, Wednesday’s split shows where AI risk lies. The cloud platforms book the AI revenue, and their suppliers take on the capacity and cost risk. Amazon alone expects about $220 billion in 2026 capital spending.

Data Center Stocks Feel the Texas Chill

Some stocks fell while the Dow rose. Clarín reported that Tesla and SpaceX dove as the Dow surged. CoreWeave (NASDAQ:CRWV) was down 5.12% as of 9:51 AM ET, and IREN was down 4.64% as of 9:43 AM ET. Both moves followed wins by Texas Democrats for statewide offices on a platform that included pausing new data center approvals. In August, CoreWeave’s chief executive, Michael Intrator, said that “moratoriums are not going to impact the demand for this infrastructure; they are going to impact where this infrastructure gets built.” CoreWeave has debt-to-equity near 8.9x, so where it can build matters a great deal.

What to Watch Before the Closing Bell

Wednesday’s move matches a view Fundstrat’s Tom Lee gave CNBC on Oct. 30, per Stocktwits: “I think people are going to plan to buy the dip. But as strange as it sounds, I think people are marking their calendar until November 3rd.” A single session can’t confirm that view.

• Whether the gains hold through the close, and whether the rally widens or narrows to a few leaders.
• How energy, NVIDIA and the data center names trade this afternoon. For its current quarter, NVIDIA guided to revenue of $108 billion, plus or minus 2%.
• Borrowing costs. The 10-year Treasury yield fell to 4.91% on Nov. 2 from 5.31% on Oct. 5. If that decline holds, it could feed through to mortgage rates.

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