Six days after Election Day, Wall Street traded the “blue wave” twice: a Wednesday celebration, followed by a Thursday and Friday cool-down. What matters isn’t “the Democrats won,” but whose business will actually be transformed.
In the November 3 U.S. midterm elections, Democrats flipped seven Senate seats and more than 40 House seats to take control of both chambers, and also won five governorships. During Wednesday’s session, the Dow Jones Industrial Average rose as much as 1,112 points, or 2.1%; the S&P 500 gained 1.8%, and the Nasdaq Composite rose 2.4%. The leaders were all policy-sensitive sectors: First Solar rose 4.6%, Sunrun gained 1.3%, and Enphase Energy climbed 3.7%; the Invesco Solar ETF rose 5.65% to close at $45.79. Hospital stocks HCA Healthcare and Universal Health Services rose 10.3% and 10.9%, respectively. Among airlines, Delta Air Lines gained 8.8% for the week and United Airlines rose 8.2%.
The chain of cause and effect is straightforward: Democrats held on to the green subsidies in the Inflation Reduction Act, preventing Congress from repealing them, and may also push the Bipartisan American Affordable and Jobs Act, speeding up approvals for solar projects and expanding the power grid. On healthcare, House Speaker candidate Jeffries has already said that his “first 100 hours” agenda will include fully repealing Medicaid cuts and restoring the Affordable Care Act’s enhanced premium tax credits, which are due to expire at the end of 2025. William Blair responded by upgrading First Solar to Outperform.
But on Thursday, the market poured cold water on the rally: a plunge in AI stocks dragged down the broader market, and the Invesco Solar ETF fell about 3.7%, giving back most of Wednesday’s gains; it remains down more than 10% year to date. That reality check was warranted: this rally is fueled by expectations, not legislation. Three hard constraints remain. First, President Donald Trump’s term runs until January 2029, and he has veto power. Second, Democrats lack the two-thirds majority needed to override a veto—both chambers need a two-thirds vote to overcome a presidential veto. Third, the new Congress won’t take office until January 2027. More importantly, the 2025 tax law has stripped incentives from most solar projects that begin construction after July 4, 2026. Projects coming online after 2027 will largely be ineligible for subsidies, and Democrats can’t change this phaseout schedule in the short term.
So this rally needs to be viewed in parts. First Solar is a genuine beneficiary: it has $1.7 billion in net cash and a backlog of 45.1 gigawatts stretching through 2030. For full-year 2026, it is expected to receive $2.07 billion–$2.19 billion in Section 45X advanced manufacturing production tax credits—the government subsidy for solar panels made in the United States. Its price-to-earnings ratio is about 10.8, and its stock is down more than a third from its June high of $320.95. The tailwind is reaching an affordable domestic manufacturer. By contrast, policy can’t rescue Enphase Energy and Sunrun, which focus on residential rooftop solar. After Enphase Energy issued a weak fourth-quarter outlook on October 28, its shares fell about 20% in a single day. Its fourth-quarter revenue guidance was as low as $225 million. The underlying problems are high interest rates and the expiration of the federal residential solar tax credit. Democrats can’t lower mortgage rates or restore an expired credit. Sunrun is up about 33% this week. The more sharply it rises, the more important it is to ask: are orders driving the gain, or sentiment?
Hospital stocks have a more tangible case: from the November 3 close to the November 6 close, HCA Healthcare rose about 7% and Centene gained about 3%. Restoring subsidies and repealing Medicaid cuts are among the things Democrats aim to do in their “first 100 hours,” giving them a much shorter path to delivery than a solar bill. The airline trade is straightforward, too: analysts believe a recovery in consumer confidence among Democratic voters will support travel demand.
There are three risks. First, the U.S. October Consumer Price Index will be released Tuesday at 9:30 p.m. Beijing time. If core inflation is sticky month over month, the odds of a December rate hike will rise again, and high rates will hit financing-dependent companies like Sunrun first. Second, expectations of tighter AI regulation are still building. Thursday’s 5.52% plunge in the Nasdaq Composite is proof: until risk appetite returns, a broader market sell-off could drag down the solar rebound at any moment. Third, if Democrats fail to produce legislation soon after taking office in January, the market will give back the gains from “expectations trading,” with interest.
Policy can light the fire, but it can’t ignite wet wood. In this blue wave, are you betting on orders—or sentiment?
#美国中期选举 #Solar
In the November 3 U.S. midterm elections, Democrats flipped seven Senate seats and more than 40 House seats to take control of both chambers, and also won five governorships. During Wednesday’s session, the Dow Jones Industrial Average rose as much as 1,112 points, or 2.1%; the S&P 500 gained 1.8%, and the Nasdaq Composite rose 2.4%. The leaders were all policy-sensitive sectors: First Solar rose 4.6%, Sunrun gained 1.3%, and Enphase Energy climbed 3.7%; the Invesco Solar ETF rose 5.65% to close at $45.79. Hospital stocks HCA Healthcare and Universal Health Services rose 10.3% and 10.9%, respectively. Among airlines, Delta Air Lines gained 8.8% for the week and United Airlines rose 8.2%.
The chain of cause and effect is straightforward: Democrats held on to the green subsidies in the Inflation Reduction Act, preventing Congress from repealing them, and may also push the Bipartisan American Affordable and Jobs Act, speeding up approvals for solar projects and expanding the power grid. On healthcare, House Speaker candidate Jeffries has already said that his “first 100 hours” agenda will include fully repealing Medicaid cuts and restoring the Affordable Care Act’s enhanced premium tax credits, which are due to expire at the end of 2025. William Blair responded by upgrading First Solar to Outperform.
But on Thursday, the market poured cold water on the rally: a plunge in AI stocks dragged down the broader market, and the Invesco Solar ETF fell about 3.7%, giving back most of Wednesday’s gains; it remains down more than 10% year to date. That reality check was warranted: this rally is fueled by expectations, not legislation. Three hard constraints remain. First, President Donald Trump’s term runs until January 2029, and he has veto power. Second, Democrats lack the two-thirds majority needed to override a veto—both chambers need a two-thirds vote to overcome a presidential veto. Third, the new Congress won’t take office until January 2027. More importantly, the 2025 tax law has stripped incentives from most solar projects that begin construction after July 4, 2026. Projects coming online after 2027 will largely be ineligible for subsidies, and Democrats can’t change this phaseout schedule in the short term.
So this rally needs to be viewed in parts. First Solar is a genuine beneficiary: it has $1.7 billion in net cash and a backlog of 45.1 gigawatts stretching through 2030. For full-year 2026, it is expected to receive $2.07 billion–$2.19 billion in Section 45X advanced manufacturing production tax credits—the government subsidy for solar panels made in the United States. Its price-to-earnings ratio is about 10.8, and its stock is down more than a third from its June high of $320.95. The tailwind is reaching an affordable domestic manufacturer. By contrast, policy can’t rescue Enphase Energy and Sunrun, which focus on residential rooftop solar. After Enphase Energy issued a weak fourth-quarter outlook on October 28, its shares fell about 20% in a single day. Its fourth-quarter revenue guidance was as low as $225 million. The underlying problems are high interest rates and the expiration of the federal residential solar tax credit. Democrats can’t lower mortgage rates or restore an expired credit. Sunrun is up about 33% this week. The more sharply it rises, the more important it is to ask: are orders driving the gain, or sentiment?
Hospital stocks have a more tangible case: from the November 3 close to the November 6 close, HCA Healthcare rose about 7% and Centene gained about 3%. Restoring subsidies and repealing Medicaid cuts are among the things Democrats aim to do in their “first 100 hours,” giving them a much shorter path to delivery than a solar bill. The airline trade is straightforward, too: analysts believe a recovery in consumer confidence among Democratic voters will support travel demand.
There are three risks. First, the U.S. October Consumer Price Index will be released Tuesday at 9:30 p.m. Beijing time. If core inflation is sticky month over month, the odds of a December rate hike will rise again, and high rates will hit financing-dependent companies like Sunrun first. Second, expectations of tighter AI regulation are still building. Thursday’s 5.52% plunge in the Nasdaq Composite is proof: until risk appetite returns, a broader market sell-off could drag down the solar rebound at any moment. Third, if Democrats fail to produce legislation soon after taking office in January, the market will give back the gains from “expectations trading,” with interest.
Policy can light the fire, but it can’t ignite wet wood. In this blue wave, are you betting on orders—or sentiment?
#美国中期选举 #Solar