European Stocks Rally After Democrats Win US Midterms

European stock markets rallied on November 4, 2026, following a landslide victory for the Democratic Party in the United States midterm elections. Investors viewed the Democratic takeover of both the House of Representatives and the Senate as a critical check on the legislative agenda of President Donald Trump, a result that significantly reduced market uncertainty.

The Stoxx Europe 600 rose 1.91%, with Spain's IBEX 35 leading gains at 3%. Banking stocks saw particularly sharp increases, with the Stoxx 600 Banks Index climbing as much as 4.5%, its strongest daily performance since May. Major institutions HSBC Holdings Plc and Banco Santander SA drove the rally, while Raiffeisen Bank International and Lion Finance Group Plc recorded the largest individual gains, surging 6.4% and 5.9% respectively. U.S. banking stocks also trended higher in pre-market trading.

Additional support for the rally came from a nearly 9% drop in Brent crude oil prices to $94.47 a barrel and strong corporate earnings from firms such as Heidelberg Materials, Scout24, and Fresenius. However, Eurostat reported a counteracting economic trend, noting that annual eurozone inflation rose to 4% in October from 3.8% in September, primarily driven by energy prices that were 20.8% higher than the previous year.