European shares jump to 2-month highs following U.S. midterms; Novo surges

European shares jumped to its highest in over two months on Wednesday after Democrats won control of both chambers of the US Congress, and boosted by heavyweight Novo Nordisk. 

The pan-European STOXX 600 index advanced 1.2% in its best showing since July, with healthcare giant Novo Nordisk jumping nearly 6% after the Wegovy maker reported third-quarter adjusted operating profit above expectations and raised its full-year sales and profit forecasts.

Germany’s DAX and France’s CAC 40 over 1% each, while London’s FTSE 100 gained 0.9%. Italy’s FTSE MIB and Spain’s IBEX 35 surged over 2% each.  

Trading sentiment was heavily shaped by preliminary returns from Tuesday’s U.S. congressional elections, where exit polls and early counts pointed to significant Democratic pickups across the House of Representatives and a tightly contested Senate battle.

"Trump’s willingness to engage with Democrats has provided an additional source of reassurance, while greater clarity around the election outcome is encouraging some dip-buying after recent weakness," said Daniela Hathorn, senior market analyst at Capital.com

For European governments and export-heavy conglomerates, a Democratic-controlled limits Trump’s capacity to unilaterally execute aggressive trade tariffs and roll back clean-energy subsidies, while also introducing fresh uncertainty over U.S. fiscal support for NATO and Ukrainian defense funding.

European clean-energy stocks saw strong bids, while defense stocks fell in sympathy. BAE Systems dropping about 4%, and Chemring and Avon Technologies, both with high U.S. exposure, slid 3% and 2.4%, respectively. Leonardo SpA slipped 2%.  Thales, Babcock, Saab, and Rheinmetall shed between 2% and 3.5%.

AMD warnings buffer tech

Bucking the broader regional downturn, beaten-down European technology shares found favor, paring back a portion of the steep losses logged earlier in the week.

The rebound followed robust quarterly results from Advanced Micro Devices (AMD), which delivered strong data-center revenue growth and resilient guidance.

The performance eased acute market anxiety over the sustainability of artificial intelligence capital expenditures, providing a counterweight to last week’s historic 30% collapse in Intel and Apple’s warning that rising memory silicon costs would compress holiday gross margins.

Regional semiconductor equipment makers and chip designers - including ASML Holding, ASM International, STMicroelectronics, BE Semiconductor and Prosus stabilized and gained between 1% and 3%. 

Meanwhile, Euro zone inflation rose to a three-year high in October on expensive energy firming up market bets for another European Central Bank rate hike in December.

Among other earnings moves, Continental gained 7% after raising its 2026 profitability outlook.