Oil Prices Keep Markets on Edge 05/11/2026
Market Wrap
U.S. stocks rallied sharply Wednesday after Democrats swept both chambers of Congress in the midterm elections, easing political uncertainty and fueling broad buying across Wall Street. Investors also welcomed a steep drop in oil prices as hopes for a diplomatic resolution to the Iran conflict improved.
The Dow Jones Industrial Average surged 1,569.40 points, or 3.03%, to 53,356.12. The S&P 500 advanced 1.58% to 7,688.62, while the Nasdaq Composite climbed 1.44% to 25,736.51. The Russell 2000 gained 1.58%, underscoring the breadth of the post-election rally.
Hospital operators and retailers serving lower-income consumers were among the session's strongest performers as traders reassessed the policy outlook under divided government. Treasury yields eased alongside falling energy prices, providing further support for equities.
The technology sector presented a more mixed picture. Large cloud and AI companies attracted buyers, but data-center operators faced pressure on concerns that a Democratic Congress could increase scrutiny of infrastructure expansion and energy-intensive computing projects.
The rally reversed the cautious overnight reaction to the election outcome. With control of Congress resolved, investors shifted attention from political uncertainty to potential changes in fiscal policy, industry regulation and the outlook for corporate earnings.
Energy markets also moved sharply. Oil prices tumbled as investors interpreted the election result as increasing pressure on Washington to pursue negotiations over the Iran conflict, reducing the near-term premium attached to potential supply disruptions.
Despite Wednesday's rebound, traders remain sensitive to developments in the Strait of Hormuz, where any escalation could quickly revive supply concerns. The durability of the rally will also depend on inflation, Federal Reserve policy and whether AI spending can support corporate profitability.
Thursday's focus turns to weekly U.S. jobless claims and preliminary third-quarter productivity and unit labor costs at 8:30 a.m. ET. Earnings from ConocoPhillips (COP), Duke Energy (DUK) and Parker-Hannifin (PH) are scheduled before the opening bell, followed by Monster Beverage (MNST) and EOG Resources (EOG) after the close.
Oil Plunges as Election Reshapes Iran War Outlook
Oil prices suffered a steep selloff Wednesday as investors reassessed the outlook for the U.S.-Iran conflict following the Democratic sweep of Congress. The result raised expectations of greater political pressure for negotiations and reduced fears of prolonged supply disruption.
Brent crude fell to its lowest closing level in more than two months, while both major oil benchmarks posted sharp declines. The pullback helped ease inflation concerns and supported a broad rally in U.S. equities and government bonds.
The Strait of Hormuz remains central to the energy outlook. Any disruption to shipping through the critical route could threaten global crude supplies and quickly reverse the recent decline in prices.
Investors are weighing whether a changed political balance in Washington could encourage a diplomatic settlement. President Donald Trump has signaled willingness to work with Democrats, although the path to de-escalation remains uncertain.
Lower crude prices could provide relief to consumers and businesses by reducing transportation and input costs. That would also help ease pressure on inflation expectations at a time when Federal Reserve policy remains a major market driver.
For energy producers, however, a sustained decline in crude could weigh on revenue expectations. Oil-sensitive equities may remain volatile as traders adjust forecasts for demand, supply and geopolitical risk.
With the Middle East situation unresolved, the oil market remains vulnerable to abrupt headlines. Traders will be watching diplomatic developments, shipping conditions and inventory data for clues about the next move.
Stocks on the Move
- Qualcomm (QCOM): Shares fell almost 6% despite a modest fiscal fourth-quarter earnings beat. The chipmaker forecast current-quarter adjusted earnings of $2.15–$2.35 per share, compared with analysts' $2.26 estimate.
- AppLovin (APP): Shares surged more than 20% after the advertising software company beat third-quarter expectations. Adjusted EBITDA reached $1.84 billion versus $1.73 billion expected, while revenue of $2.18 billion topped the $2.07 billion consensus.
- Expedia (EXPE): Shares dropped more than 7% after the travel platform issued softer-than-expected fourth-quarter guidance. Revenue is projected at $3.69 billion–$3.75 billion, compared with the $3.74 billion consensus, despite a third-quarter earnings and revenue beat.
- Coherent (COHR): Shares gained 7% after adjusted earnings of $2.09 per share exceeded the $1.99 consensus. Revenue and current-quarter guidance also surpassed expectations.
- Zillow (Z): Shares plunged more than 16% after third-quarter adjusted earnings of $0.55 per share missed the $0.59 estimate. Revenue of $724 million also fell short of the $754 million consensus.
- Klaviyo (KVYO): Shares declined about 5% despite beating third-quarter estimates. Adjusted earnings of $0.22 per share topped the $0.17 consensus, while revenue of $387.2 million exceeded expectations of $380 million. The company also raised full-year revenue guidance.
Watchlist: QCOM, APP, EXPE, COHR, Z, KVYO, NVDA, MSFT, AMZN, AMD, CRWV, COP, PH, DUK, MNST, EOG, AAPL, META
Key Economic Events Today
Economic Data (ET)
- 07:30 AM — USD Challenger Job Cuts (October)
- 08:30 AM — USD Initial Jobless Claims, Continuing Jobless Claims, Preliminary Nonfarm Productivity (Q3), Preliminary Unit Labor Costs (Q3)
- 10:30 AM — USD EIA Natural Gas Storage
Earnings
Before Market Open: ConocoPhillips (COP), Parker-Hannifin (PH), Southern Company (SO), Duke Energy (DUK), Air Products (APD), Kimberly-Clark (KMB)
After Market Close: Monster Beverage (MNST), EOG Resources (EOG)
