Midterms: Market Roared, Tech Sat It Out

The Dow ETF rose 3.1% the day after the 2026 midterms, its best day since April 2025, while tech was flat and energy fell 4.7%.

On Monday, veteran strategist Ed Yardeni warned on Bloomberg TV that a Democratic sweep of Congress could be a “very cold shower” for stocks. “Usually the market loves gridlock, but in this situation we’re talking about much more partisanship,” he said.

Two days later, Democrats won both chambers, and stocks rallied. The SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA) rose 3.1% on 4 November. It was the fund’s best day since 9 April 2025, the day tariffs were paused. Nearly 90% of U.S.-listed equity ETFs closed higher.

The rally had a clear shape. The Invesco QQQ Trust (QQQ), which tracks the Nasdaq-100, gained 1.0%. The Technology Select Sector SPDR Fund (XLK) finished flat. Investors spent the day sorting the businesses that gain from a divided Washington from those that lose.

Dow ETF: best day since April 2025. Price moves on 4 November 2026: Dow (DIA) +3.1%, S&P 500 (SPY) +1.7%, Nasdaq-100 (QQQ) +1.0%.

The Winners: Housing, Health Care And Airlines

Housing led the gains. The iShares U.S. Home Construction ETF (ITB) jumped 7% as Treasury yields slipped. The iShares U.S. Medical Devices ETF (IHI) rose almost as much. The broader Health Care Select Sector SPDR Fund (XLV) added 3%.

Cheaper oil helped the businesses that burn it. The U.S. Global Jets ETF (JETS) gained 6.7%. Clean energy rallied too, and the Invesco Solar ETF (TAN) rose 5.7%. Consumer funds joined in. The Consumer Discretionary Select Sector SPDR Fund (XLY), which holds retailers, restaurants and carmakers, rose 4.3%.

The Losers: Oil, Defense And Chips

Energy followed oil down. The Energy Select Sector SPDR Fund (XLE) fell 4.7%. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP), which holds drillers, lost 6.4%. Defense funds slid on worries that a Democratic Congress will curb military spending. The SPDR S&P Aerospace & Defense ETF (XAR) dropped 3.6%.

Chips were the surprise. The VanEck Semiconductor ETF (SMH) fell 2.7%. Nvidia Corp. (NVDA) and Micron Technology Inc. (MU) were among its decliners. Daniela Hathorn, senior market analyst at Capital.com, said tech stocks are sensitive to possible congressional scrutiny of AI investment and data center expansion. That spending is behind much of this year’s chip demand.

Homebuilders rose 7%, energy fell 5%. Price moves on 4 November 2026: homebuilders (ITB) +7.2%, medical devices (IHI) +6.7%, airlines (JETS) +6.7%, solar (TAN) +5.7%, consumer discretionary (XLY) +4.3%, health care (XLV) +3.1%, technology (XLK) 0.0%, aerospace and defense (ITA) -1.5%, semiconductors (SMH) -2.7%, defense (XAR) -3.6%, energy (XLE) -4.7%, oil and gas drillers (XOP) -6.4%.

The Year’s Leaders Took The Hit

The day ran against the year. Through Tuesday, the iShares Semiconductor ETF (SOXX) was up 55% in 2026, and XLE was up 52%. Both fell on Wednesday.

Homebuilders, airlines, medical devices, solar and communication funds had all lost ground this year. Each of them rose more than 3% the day after the vote.

2026's winners fell, laggards jumped. Total return this year to 3 November 2026, then the price move on 4 November: semiconductors (SOXX) +55%, then -3.1%; energy (XLE) +52%, -4.7%; technology (XLK) +23%, 0.0%; consumer discretionary (XLY) -1%, +4.3%; airlines (JETS) -2%, +6.7%; homebuilders (ITB) -2%, +7.2%; medical devices (IHI) -9%, +6.7%; solar (TAN) -12%, +5.7%; communication (XLC) -13%, +3.5%.

The pattern held across the market. We ranked U.S.-listed equity ETFs by their return this year and split them into fifths. The fifth with the biggest gains rose a median 1.3% on Wednesday. That was about half the rise of the fifth with the weakest returns. A third of the year’s leaders closed lower.

The Dow ETF had its best day since April 2025. The year’s laggards led, and 2026’s biggest winners, chips and energy, gave back ground. For one day, the year’s scoreboard flipped.

Disclosure: Data as of 4 November 2026. Fund counts cover 1,043 U.S.-listed equity ETFs that are at least three years old and hold at least $20M in assets, excluding leveraged and inverse funds. This is not investment advice or a recommendation to buy or sell any security. We receive no compensation from the issuers of the funds mentioned. Our managers may or may not hold positions in the funds mentioned.

First published in the ETF Copilot newsletter.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.