Spenders Rallied | Oil Lost Without a Deal | Price Rests on Tax Credits | Texas Split the Miners

The market bought AI's spenders and sold the companies building for them.

The Dow rose about 1,570 points, or 3%, and the S&P 500 gained about 1.6% the day after Democrats won both chambers. The VIX fell about 20%. The semiconductor index fell about 3% on the same day.

The money went to the companies that buy AI capacity. Microsoft (MSFT) rose about 6.7% and Amazon (AMZN) about 6.1%.

It left the companies that supply the power, the data centers and the chips. Vistra (VST) fell about 14%, Quanta Services (PWR) about 12% and CoreWeave (CRWV) about 10%, touching a 52-week low. Nvidia (NVDA) slipped about 3%.

Defense joined the sellers, and Lockheed Martin (LMT) fell about 7%. Homebuilders led the gainers. D.R. Horton (DHI) rose about 8%.

After the bell, AppLovin (APP) jumped more than 15% after revenue grew 55%. Arm (ARM) grew revenue 27% to $1.44 billion, above its own forecast range, and barely moved. Qualcomm (QCOM) beat estimates and fell about 6%.

Buyers Up, Builders Down

The market appeared to treat a divided Washington as good news for AI's spenders and bad news for its suppliers. Among AI stocks, the heaviest selling hit power, grid and data-center names, the businesses that need permits to grow.

Oil shed part of its war premium. Nobody signed anything.

Brent fell nearly 9% to settle near $94.60, below $100 without a deal with Iran. U.S. crude settled at $88.12, down 8.3%, its biggest one-day drop since May.

President Trump had said there were no immediate plans to strike Iran. The slide deepened after Vice President JD Vance wrote that "the reason we lost is the war."

Tehran gave no ground. Its supreme leader said anyone expecting a shift in U.S. policy is "seriously mistaken." The U.S. naval blockade and the Hormuz restrictions remain in place.

Airlines took the other side of the trade. United (UAL) rose about 8% and Delta (DAL) about 7%. Exxon Mobil (XOM) fell about 4.5% and Chevron (CVX) about 3.7%.

Priced on Intent

The blockade and the Hormuz restrictions held. What changed was Washington's tone, and Tehran kept saying no. A price that falls this fast on intent can climb just as fast on a reversal.

Treasury kept its auction sizes. It softened the promise to keep them.

Treasury left every coupon auction size unchanged. It also cut two words from its guidance. It now expects to keep sizes "for the next several quarters" instead of "for at least" that long. Planned liquidity-support buybacks nearly doubled, to as much as $70 billion for the quarter.

Its advisory committee said bigger auctions will be warranted later in fiscal 2027. Dealers expect the extra supply in two- to 10-year notes.

Bonds rallied anyway. The 10-year yield fell about 6 basis points to near 4.89%, giving back Tuesday's rise.

The rate bet went the other way. Kalshi's December hike contract rose to about 80 cents, even as ISM services cooled to 54.5. Polymarket's Senate contract settled at $1 for the Democrats.

Supply Later, Hike Sooner

Treasury bought room to borrow more next year, and bonds rallied the day it did. The December hike bet rose anyway. Friday's payrolls are its next test.

Half the price of a private equity exit rests on expected tax credits.

Energy Capital Partners agreed to sell Harvestone Low Carbon Partners to The Andersons (ANDE) for $915 million. Harvestone owns three ethanol plants and runs carbon capture. The buyer said roughly half the price is attributed to expected federal tax credit cash flows.

The Andersons will fund all of it with new borrowing from banks and a farm lender. Its stock fell about 12%.

PAI Partners agreed to buy skincare brand Elemis from L'Occitane, which paid about $900 million for it in 2019. The price was not disclosed.

Public markets weighed the quarter against what comes next. McDonald's (MCD) rose about 6.5% after an earnings beat, though its U.S. comparable sales fell 0.2%. FIS (FIS) beat estimates by a cent, cut its outlook and lost about 24%.

Paying for What Comes Next

A buyer is borrowing the whole price, and by its own account half of it rests on expected federal credits. In public markets, FIS beat by a cent, cut its outlook and still fell about 24%. Both prices were set by what comes next, not by the quarter that ended.

Bitcoin cleared $80,000. Texas split the miners in two.

Bitcoin rose about 3.6% to near $80,100, back above $80,000 for the first time since the Binance theft. Ether gained about 6.4%.

Gov. Greg Abbott conceded the Texas governor's race to Democrat Gina Hinojosa, who campaigned on pausing data-center approvals. Bernstein then cut price targets on seven miners, Riot (RIOT) and CleanSpark (CLSK) among them, by 35% to 54%.

Hut 8 (HUT) fell about 23%, Cipher (CIFR) about 20%, and CleanSpark and Galaxy (GLXY) about 17% each. Hut 8 also reported lower revenue the same day. Riot rose about 10% after disclosing a $28 billion, 15-year lease of its Texas campus to an AI lab. It also said it sold 20,264 bitcoin this year, mainly to fund construction.

Circle (CRCL) rose about 1%. Its 17% revenue growth included $182 million from a one-time token presale, and without it revenue fell about 8%.

Signed Beats Planned

Bitcoin rose with stocks, but the miners split on contracts. A signed lease held up, and plans that still need Texas approvals did not.

Congress changed hands, and the market re-sorted the winners.

AI's spenders rallied while its builders fell. Oil shed part of its war premium without a deal. Treasury dropped two words, and bonds rallied anyway.

Half of a $915 million exit rests on expected tax credits. Bitcoin cleared $80,000 while Texas split the miners. Airbnb (ABNB) reports Thursday, and payrolls land Friday.

The majorities are decided. Now the market prices the permits.