European stock markets opened higher following the Democrats' victory in the U.S.

European stock indices rose after Democrats gained control of both chambers of Congress in the U.S. midterm elections, according to Bloomberg. The pan-European STOXX 600 gained 0.5%, the German DAX rose 0.4%, the British FTSE rose 0.2%, and the French CAC rose 0.3%.

Shares of renewable energy companies showed strong gains: the Democrats’ decisive victory is seen as a positive factor for players in the clean energy supply chain, the agency notes. Investors believe this will support solar panel and battery manufacturers, to the detriment of the traditional energy sector.

Shares of the Danish wind power operator Orsted jumped 7.3%, while shares of its competitor, Vestas Wind Systems, rose 5.5%. In recent years, both companies have faced uncertainty in their U.S. operations, partly due to the Donald Trump administration’s strong opposition to the renewable energy sector, CNBC notes. SMA Solar shares rose 5.5%, while Nordex shares rose 4.8%.

Ahead of the midterm elections, JPMorgan strategists noted that a Democratic victory would support clean energy stocks thanks to more favorable policies regarding budget funding, regulation, and permitting.

In addition, these stocks are benefiting from a shift in capital away from artificial intelligence-related securities, as some of the elected candidates have openly opposed the aggressive expansion of data centers. European stocks outperformed the U.S. market in the month leading up to the U.S. midterm elections amid a large-scale rotation of capital from AI into more defensive sectors, according to Bloomberg.

“Democratic victories in states such as Texas could slow the pace of AI infrastructure expansion and have a broader impact on capital expenditures in this sector, which could have implications for the entire cycle,” warned Wolf von Rothberg, an equity strategist at the Swiss bank Bank J. Safra Sarasin. At the same time, he noted that Trump’s concession of the Republican Party’s defeat has alleviated a key concern about a protracted political crisis. “The markets are definitely viewing this as a relief,” Rothberg said.

"The midterm and presidential elections are taking on a significance for us in Europe that they have never had before," said Michael Field, chief market strategist at Morningstar. He believes that the division of power between Congress and the president should curb any large-scale measures in the future, which will ultimately benefit the economy and business.

This article was AI-translated and verified by a human editor