The Dow Jones Industrial Average jumped 1,569.40 points, or 3%, to 53,356.12 on Wednesday as investors reacted to the outcome of Tuesday's U.S. midterm elections, but chipmakers missed the rally: the PHLX Semiconductor Index fell 3.1%.

That divide matters more for Asia than the headline gain. Buyers favored health care, retailers and the largest U.S. technology platforms, and sold chip and AI infrastructure stocks. In New York, the iShares MSCI South Korea ETF fell 1.8% and the iShares MSCI Taiwan ETF lost 1.3%, while U.S.-listed funds tracking Japan and Chinese large caps rose 1.4% and 4.2%, according to Nasdaq data.

The S&P 500 rose 119.70 points, or 1.6%, to 7,688.62, its best day in three months, the Associated Press reported. The Nasdaq Composite gained 1.4% to 25,736.51, and the Russell 2000 index of smaller companies climbed 1.6% to 2,856.95. The S&P 500 is up 12.3% this year.

Oil fell hard. Brent crude dropped 8.7% to $94.62 a barrel after touching its lowest level in two months, as traders weighed the chance that the war with Iran could ease, the AP said. Treasury yields fell as cheaper oil took pressure off inflation, and the 10-year yield ended at 4.90%, down from 4.95% on Tuesday, Treasury Department data showed. Exxon Mobil lost 4.6% and ConocoPhillips 5.2%, the AP said. The swing in crude matters for Asia: China, India, Japan and South Korea received 69% of the crude oil and condensate that moved through the Strait of Hormuz in 2024, the U.S. Energy Information Administration estimates.

Chip Stocks Fall While Microsoft, Apple and Amazon Rally

Nvidia fell 3.2% to $200.13, Nasdaq data showed, and was the heaviest weight on the S&P 500, according to the AP. CoreWeave, which rents out AI computing power, sank 9.9%. Memory stocks took some of the worst losses: Micron Technology dropped 7% to $795.23 and Sandisk 7.9%, Nasdaq data showed. American depositary receipts of Taiwan Semiconductor Manufacturing Co. fell 2.4% to $395.19, and Broadcom slipped 2%.

The semiconductor index closed at 10,268.65, down 331.75 points, after trading as low as 10,064.73. The AP said investors were weighing what the vote could mean for the build-out of AI data centers, and that AI-related shares had been under pressure even before Election Day on concern they had become overvalued.

The companies that buy the chips did far better. Microsoft rose 6.7%, Amazon.com 6.1% and Apple 5.3%, to $349.51, and both Microsoft and Apple traded above their previous 52-week highs during the session, Nasdaq data showed. Alphabet gained 3.2% after what the AP called its worst loss ever on Oct. 29, when concern about its AI spending had also cooled Asia's rally in AI stocks.

For Asian investors, that pattern cuts the wrong way. South Korea's Samsung Electronics said last week that AI demand drove another record quarter for its memory business, with sharply higher sales of HBM4 chips, and Hsinchu-based TSMC calls itself the world's leading dedicated chip foundry. Taiwan's market was already bruised after the Taiex fell 5.7% in October on foreign selling.

Elsewhere on Wall Street, defense contractors fell, led by a 6.9% drop in Lockheed Martin, while hospital operator HCA Healthcare jumped 10.3% and Dollar Tree rose 9.6%, the AP reported.

Asian markets had moved without a clear direction before the U.S. open. Japan's Nikkei 225 fell 1.42% to 62,188.63 on Wednesday, while South Korea's Kospi rose 0.62% to 5,683.80, Hong Kong's Hang Seng Index gained 1.67% and China's CSI 300 climbed 2.31%, Sharecast News reported.

Qualcomm and Arm Slide After the Bell

Two chip designers with deep ties to Asian phone makers reported after the close, and both fell in extended trading.

Qualcomm had gained 5.3% in regular trading to $173.19 but was down about 6% in after-hours trading shortly before 4:50 p.m. in New York, Nasdaq data showed. Its fiscal fourth-quarter revenue fell 8% from a year earlier to $10.32 billion, and adjusted earnings dropped to $2.17 a share from $3.00. Handset chip sales slid 26% to $5.14 billion, while automotive chip revenue rose 89% to $1.99 billion.

The San Diego company forecast revenue of $10.4 billion to $11.2 billion for the quarter ending in December. It also pointed to a broad rise in industry input costs, from wafer fabrication and advanced packaging to memory, and said it is raising product prices, with the full benefit to its chip unit's margins expected in the second half of fiscal 2027. Chief Executive Cristiano Amon said in the release that “Fiscal 2027 marks the start of our non-handset revenue inflection.” Qualcomm also said it had renewed long-term licensing agreements with Apple, Huawei and Transsion.

Arm Holdings, whose controlling shareholder is SoftBank Group, posted record fiscal second-quarter revenue of $1.44 billion, up 27% and above its own forecast of $1.38 billion, plus or minus $50 million. Royalty revenue grew 8% to $670 million, a gain the company said was partly offset by the effect of memory pricing on the smartphone market. Arm named smartphone makers OPPO and vivo as adopters of its newest mobile compute technology. It guided for revenue of $1.54 billion, plus or minus $50 million, in the December quarter. Its shares had already dropped 5.3% in regular trading to $191.80 and were down about 3.7% more after hours shortly before 4:50 p.m.

The next big read on AI chip demand comes from Nvidia, which hosts its fiscal third-quarter results call at 5 p.m. New York time on Nov. 17, or 6 a.m. on Nov. 18 in Hong Kong.