Wall Street’s post-election celebration lasted just one day.

Wall Street’s post-election celebration lasted just one day. On Wednesday, November 4, after Democrats won control of both chambers of Congress in the midterm elections, the Dow Jones Industrial Average jumped about 1,570 points, or 3%, to 53,356.12, its best day since April 2025. Oil prices plunged more than 8% on hopes that a Democratic Congress could help end the US-Israeli war with Iran. Then on Thursday, November 5, stocks crashed. Based on late-session figures (official closing numbers weren’t yet confirmed by wire reports), the S&P 500, which tracks the 500 biggest US companies, fell about 4%, its worst day since the April 2025 tariff shock. The tech-heavy Nasdaq dropped more than 5%, and the Dow lost about 3%, erasing all of Wednesday’s gains. The trigger was a wipeout in AI and chip stocks. Investors worried that the new Democratic Congress and state governments could push for tighter AI rules or pauses in building data centers, which would mean fewer AI chip purchases. Nvidia fell nearly 9%, erasing its gains for the year, AMD dropped about 15%, and Qualcomm sank after warning that higher memory-chip costs are hurting sales. The Nasdaq confirmed a “correction,” meaning it closed more than 10% below its October 6 record, and every sector of the S&P 500 fell. Wall Street’s “fear gauge,” the VIX index that tracks expected market swings, jumped to its highest level since March.

Philippine stocks rose for a second straight day on Thursday. The PSEi, the index of the 30 biggest companies on the Philippine Stock Exchange, gained 1.46% to close at 5,778.14, after jumping 1.26% on Wednesday. Gainers outnumbered losers 122 to 74. Analysts credited the drop in global oil prices and a stronger peso, both helped by the Democrats’ win in the US midterms. Note that the US chip sell-off happened after the PSE closed on Thursday, so local stocks haven’t reacted to it yet. The peso strengthened sharply, closing at ₱62.97 per dollar, back in the ₱62 range for the first time in weeks and up from ₱63.535 on Wednesday. This came even though the Philippine Statistics Authority reported that inflation rose to 7.8% in October from 7.2% in September, the highest since February 2023. Transport costs jumped 20.1% from a year earlier because of high fuel prices and fares. Core inflation, which leaves out volatile food and energy prices, climbed to 5.4%, a sign that rising prices are spreading across the economy.

The US midterm results reached the Philippines in two very different ways this week. The first was good news. Markets bet that a Democratic Congress could help bring an end to the US war with Iran, and oil prices fell sharply. Because the Philippines imports most of its fuel and pays in dollars, cheaper oil eases pressure on the peso. That helped the peso rally back to around ₱63 and lifted Philippine stocks. If oil stays lower, it could also start to slow the fuel and transport price increases that drove October’s 7.8% inflation. The second effect could hit on Friday. Thursday’s US chip crash happened after the PSE closed, and it is likely to drag down tech-heavy Asian markets like South Korea and Taiwan. The PSE has fewer tech stocks, but global sell-offs often reduce foreign investors’ appetite for emerging markets like the Philippines. Meanwhile, the BSP faces a tough choice before its December 17 meeting: inflation is at a three-year high and core prices are rising, which argues for another rate hike, but the peso’s recovery and cheaper oil may ease some of that pressure. For OFW families, a stronger peso means slightly fewer pesos per dollar sent home, but lower fuel prices would help household budgets.