The Hang Seng Index joined a global equity rally on Wednesday, jumping more than 3% to 24,660, its highest level since September 28, after the US midterm elections produced a Democratic majority in both the House of Representatives and the Senate. The blue-chip index has now climbed more than 8% from its lowest point this year.
In the United States, the Dow Jones Industrial Average rose 1,569.40 points, or 3%, to close at 53,356.12, its strongest one-day percentage gain since April 2025. The S&P 500 added 1.6% to 7,688.62, the Nasdaq Composite gained 1.4% to 25,736.51, and the Russell 2000 rose 1.6%, signaling that the rally was not limited to mega-cap technology shares. McDonald's rose 6.5% after reporting comparable-sales growth above expectations.
Investors read the divided government outcome as a potential brake on major legislative shifts, reducing policy uncertainty for some companies. At the same time, January Brent crude fell 9.73% to $93.52 as markets priced hopes of a US-Iran settlement. Lower oil prices eased near-term inflation concerns and reduced pressure on bond yields, supporting equities. Gold continued its rally, reaching $4,130, and some analysts suggested the Federal Reserve may have room to leave interest rates unchanged at its next meeting if the trend persists.
In Hong Kong, Laopu Gold was the best performer, rising 8% as gold prices climbed; Li Auto added 8.2% and Meituan rose more than 8%. Other gainers included Netease, Alibaba, Trip.com, and Xiaomi. Laggards included Lenovo Group, Weichai Power, Orient Overseas, and PetroChina. Tesla, in contrast, fell 3.2% to $385.75 as investors weighed potential Democratic scrutiny of Musk-linked companies and artificial-intelligence infrastructure.
Technical analysis showed the Hang Seng Index broke above its 50-day exponential moving average and formed an inverted head-and-shoulders pattern, a bullish reversal signal. Traders were watching a move toward 25,000, while a drop below the strong pivot near 24,218 would invalidate the bullish outlook. The next major test for the rally comes with Friday's US employment report, which may shift Federal Reserve rate expectations and Treasury yields. Investors cautioned that the gains represented a strong one-day advance rather than a confirmed new market trend.
