U.S. stocks mostly rose Wednesday, taking benchmarks to historical peaks, a day after elections had Republicans taking control of the Senate and as a report on the jobs market came in better than anticipated.
"The takeover of the Senate was a little bit of a surprise, but not a big surprise. Investors are asking themselves, does this mean there will be any impact on the economy and earnings, and the answer to that question is probably not," said Hugh Johnson, chairman of Hugh Johnson Advisors.
Republicans gained at least seven seats in the Senate, leaving the chamber's leader, Mitch McConnell, to control the legislative agenda for the last two years of Barack Obama's presidency.
"Congress will pass some bills I can not sign; I'm pretty sure I'll take some actions that Congress won't like," Obama told a nationally televised news conference. But, "we all agree on the need to create more jobs that pay well," the president said in vowing to work with Republicans.
Historically, midterm elections come along with healthy equity returns, as investors embrace the certainty, at least in the short term, the results bring.
The CBOE Volatility Index, a measure of investor uncertainty, declined 4.8 percent to 14.17.
"There are some smaller issues that are important, such as the Federal Reserve's independence, trade negotiations, and fiscal policy, or spending, but I don't think they're going to be sufficient enough to change the forecast for the economy and earnings," said Johnson of the electoral ramifications.