2,000 years later... (in SpongeBob voice). As Americans watched election results slowly trickle in yesterday, only one thing seemed clear: the likelihood of a divided Congress (the sequel). This Democrat-controlled House and Republican-controlled Senate excited one sector: Big Tech.
- A divided Congress makes it harder to pass legislation against tech giants. Both sides have major beef with Big Tech, but their grievances are different (sometimes, opposite).
- A Blue Wave in Congress could've brought big changes to Big Tech. That doesn't seem to be happening, reducing the chance of major reform.
- So investors boosted Big Tech. The Nasdaq surged yesterday as Facebook stock jumped 8% and Google and Amazon spiked 6%.
Big Gambling... also made some election-related moves. Voters in Maryland, Louisiana, and South Dakota said "Yes" to legalized sports betting, sending DraftKings and Penn National Gaming shares up over 5%. Also making waves:
- Big Weed: Arizona, New Jersey, Montana, and South Dakota voted to legalize recreational marijuana. Oregon took it a step further, becoming the 1st to legalize magic shrooms for medical treatment.
- Buuut... Big Pot stocks Canopy, Aurora, and Tilray actually dropped because they want legalization at the federal level. A Republican Senate makes that unlikely.
The 1st reaction isn’t always the long-term one... Stocks react to news all the time — but long-term, there's a lot we still don't know. For example, it's possible that a divided House could pass laws that significantly hurt Big Tech — or green light weed.