> ## Content Index > Fetch the complete content index at: https://us.mikirduit.com/llms.txt > Use this file to discover other available public pages before exploring further. # Dow Jones Beats the S&P 500 and Nasdaq After the Midterms: Are Consumer Cyclical Stocks Next? - URL: https://us.mikirduit.com/dow-jones-beats-the-s-p-500-and-nasdaq-after-the-midterms-are-consumer-cyclical-stocks-next/ - Published: 2026-11-05T10:47:47.000Z - Updated: 2026-11-05T10:47:47.000Z - Description: The Dow outpaced the S&P 500 and Nasdaq after the midterms, and three discounted consumer cyclical stocks (BKNG, DIS, YUM) rallied. We break down the opportunities, the risks and what to watch next. - Author: Surya Rianto - Tags: Market & Macro, Markets The Dow Jones Industrial Average rose 3.03% in the post-midterm rally, ahead of the S&P 500 (+1.58%) and the Nasdaq-100 (+1.44%). Several large consumer cyclical stocks now trade well below their five-year valuation averages, but a lasting rotation depends on easing Middle East tensions and lower oil prices, not on the election result alone. ### **Key Takeaways** - The Dow rose 3.03% after the midterms, beating the S&P 500 (+1.58%) and the Nasdaq-100 (+1.44%). Only 3 of its 30 stocks fell, which may hint at sector rotation. - Booking Holdings, Disney and Yum! Brands trade 48.7% to 75% below their five-year average P/E, and all three rose on November 4, 2026. - A lasting rotation into consumer cyclicals is unproven. It depends on Middle East de-escalation and lower oil prices, not on the election result alone. ## Why the Dow Outpaced the S&P 500 and Nasdaq The three indexes are built differently, so they react differently when investors rotate between sectors. The Dow is price-weighted, which means stocks with higher share prices move it the most. The S&P 500 and Nasdaq weight companies by market value. | Index | Number of stocks | Weighting method | Character | Most sensitive to | | ----------------------------------- | ---------------- | ----------------------------------- | ------------------------------ | ------------------------------------- | | Dow Jones Industrial Average (DJIA) | 30 | Share price | Cross-sector blue chips | Rotation among blue-chip stocks | | S&P 500 | 500 | Market cap, adjusted for free float | The 500 largest U.S. companies | The U.S. economy | | Nasdaq | Thousands | Market cap | Concentrated in technology | Tech sector trends and interest rates | Breadth inside the Dow was strong: only 3 of its 30 stocks fell. The sharpest decliners were Caterpillar (CAT), Chevron (CVX) and NVIDIA (NVDA). | Top 5 Dow gainers | Move | | ---------------------- | ------ | | 3M (MMM) | +9.55% | | Microsoft (MSFT) | +6.68% | | Sherwin-Williams (SHW) | +6.64% | | The Home Depot (HD) | +6.53% | | McDonald's (MCD) | +6.53% | | Dow decliners | Move | | ----------------- | ------- | | Caterpillar (CAT) | \-5.23% | | Chevron (CVX) | \-3.69% | | NVIDIA (NVDA) | \-3.17% | When the price-weighted Dow beats the market-cap-weighted indexes by this margin, it can be an early sign of sector rotation. It is a signal to investigate, not proof. **Related reading:** [Winning and Losing Stocks After the Democratic Win: A Detailed Breakdown](https://us.mikirduit.com/divided-government-2026-6-stock-sectors-under-the-spotlight/) ## Is a Rotation Into Consumer Cyclical Stocks Starting? Our screen found 15 attractive consumer cyclical stocks out of the 50 largest by market cap. Each one trades below its own five-year average on both price-to-earnings (P/E) and enterprise value to EBITDA (EV/EBITDA). Within the Dow itself, consumer cyclicals trading below their five-year valuation averages include Amazon (AMZN), Disney (DIS), McDonald's (MCD) and Nike (NKE). Stocks in other sectors also screen cheaply: UnitedHealth (UNH), NVIDIA (NVDA), Microsoft (MSFT), Sherwin-Williams (SHW), Travelers (TRV) and Honeywell (HON). The four largest discounts in the consumer cyclical group were: | Company | P/E discount to 5-year average | EV/EBITDA discount to 5-year average | Move on Nov 4, 2026 | | ----------------------- | ------------------------------ | ------------------------------------ | ------------------- | | Booking Holdings (BKNG) | 75% | 54.2% | +9.83% | | Amazon (AMZN) | 63% | 33.9% | +6.12% | | Walt Disney (DIS) | 72% | 47.7% | +4.18% | | Yum! Brands (YUM) | 48.7% | about 11.2% | +5.92% | [Amazon has large exposure to AI infrastructure](https://us.mikirduit.com/ai-stocks-slide-is-big-techs-spending-spree-a-warning-sign/), which makes it behave differently from the other three. That is why the sections below focus on Booking, Disney and Yum! Brands. A stock trading below its own history is not automatically a bargain. Earnings may have fallen, or the market may expect them to keep falling. The next three sections look at what could change those expectations. ## Booking Holdings (BKNG): Travel Demand Is the Catalyst Booking Holdings, the parent of Booking.com, Agoda, Priceline and KAYAK, rose about 9.83% on November 4, 2026, the day after Democrats won in the midterm elections. Investors appear to be pricing in a lower chance of prolonged Middle East conflict. That is a reaction to possible policy changes, not a confirmed shift. **What could help** - **Easing conflict.** On its third-quarter 2026 results call, management said the Middle East conflict has raised airfares and cut flight capacity on some routes. That has weighed on international travel, especially long-haul trips. - **A low bar for the fourth quarter.** Booking guided room nights up only 1% to 3% year over year, down from 7% in the third quarter. It guided gross bookings up 2% to 4%, versus 10% growth last quarter, and flat adjusted EBITDA. If airfares fall, results could beat these cautious assumptions, especially into 2027. - **AI as an opportunity.** Booking is building AI assistants across its platforms. Management said referrals from AI platforms are still far below 1% of Booking.com room nights, so the near-term threat to actual bookings looks limited. ## Sign up for Mikirduit US Independent Stock Research, Earnings Analysis, and Valuation for Everyday Investors Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. **What could hurt** - **AI disruption.** If travelers start comparing and booking hotels directly through AI assistants, Booking could lose control of the customer relationship and face higher distribution costs. - **Regulation.** In the third quarter, Booking recorded a US$900 million reduction in revenue and an additional US$100 million loss related to a Federal Trade Commission (FTC) matter. Nothing shows the election result will change that case or create new rules, but regulators may look more closely at digital platforms and fee structures. - **Dependence on events.** Any recovery depends on what actually happens in the conflict, not on the makeup of Congress. A post-election price jump does not mean Booking's risks have gone away. If travel disruption continues or earnings growth falls short, the stock can still pull back. If travel recovers faster and the company's efficiency efforts work, earnings growth could be stronger in 2027. ## Walt Disney (DIS): Strong Parks, Pressure From Sports and Cash Flow Disney rose 4.18% on November 4, 2026, after the midterm results. It briefly gained about 3.8% in morning trading alongside other media and entertainment stocks. The case for Disney rests mostly on its parks and cruise business, plus a streaming business that is now clearly profitable. **What could help** - **Experiences segment.** In fiscal Q3 2026 (quarter ended June 27, 2026), Experiences revenue grew 10% to US$9.97 billion and operating income rose 20% to US$3.02 billion. Demand for parks, resorts and cruises remains solid despite economic uncertainty. - **Cruise capacity.** New ships Disney Destiny and Disney Adventure lifted cruise room capacity by about 50% year over year. Resorts and Vacations revenue grew 17%. - **International visitors.** Management said weaker international attendance at U.S. parks was still a drag, though less so in the third quarter. Lower travel costs could bring those visitors back, subject to exchange rates and travel policy. - **Streaming and Entertainment.** Entertainment revenue grew 6% to US$11.35 billion, and operating income jumped 64% to US$1.68 billion. Streaming (SVOD) operating income rose from US$329 million to US$712 million. - **Intellectual property.** Stronger copyright protection in AI development could help protect Disney's franchises, including Marvel, Pixar and Star Wars. No such law has passed, and Disney also uses AI in production, park design and customer service, so tighter rules could raise its costs. **What could hurt** - **Sports.** ESPN's operating income fell 17% year over year because of higher rights and production costs. - **Cash flow.** Free cash flow for the first nine months of fiscal 2026 fell about 24% to US$5.74 billion, driven by higher capital spending and lower operating cash flow. - **Cruise economics.** New ships require heavy investment and are sensitive to occupancy, labor costs and fuel prices. - **Advertising and content spending.** Weaker consumer spending could pressure ad revenue while streaming competition keeps content costs high. For 2027, Disney has targeted double-digit growth in adjusted earnings per share (EPS). If it delivers that and cash flow improves, the stock would have stronger support than the post-election sentiment alone. [Anthropic IPO Filing: 6 Key Takeaways for InvestorsAnthropic’s preliminary IPO prospectus reveals rapid revenue growth, a huge net loss driven largely by non-cash charges, and massive infrastructure commitments. Here are five things investors should know before the planned mid-November 2026 listing.![](https://us.mikirduit.com/content/images/icon/Mikirduit-ba67d6fa-ab28-48aa-a459-44e8f8117e76.jpg)Mikirduit USSurya Rianto![](https://us.mikirduit.com/content/images/thumbnail/Anthropic-stock-7c4b346a-ca13-444f-aafd-0f2e648ba2fe.jpg)](https://us.mikirduit.com/6-things-to-know-about-anthropics-ipo-filing/) ## Yum! Brands (YUM): Global Growth vs. a Weak U.S. Consumer Yum! Brands, the parent of KFC, Taco Bell and Habit Burger & Grill, rose 5.92% to US$166.31 on November 4, 2026\. Fast-food chains are sensitive to household budgets, so investors are watching whether Washington can ease the cost of living. Congress has limited power here: the president keeps executive authority and a veto, so a change in who controls the House and Senate does not automatically loosen policy. **What could help** - **A Taco Bell recovery.** In the third quarter of 2026, Taco Bell same-store sales fell 4% year over year, versus 7% growth a year earlier. U.S. system sales fell 3%, and Taco Bell operating profit fell 5% to US$255 million. Management said U.S. same-store sales growth has beaten the fast-food industry since late September 2026, but gave no figure, so wait for next quarter's report. - **KFC's international growth.** KFC system sales grew 6% at constant currency, and the restaurant count rose 7% to 35,421\. KFC operating profit grew 9% to US$425 million. Constant-currency sales growth was 12% in Asia, 11% in Latin America and 25% in the Middle East, Turkey and North Africa. - **Lower energy costs.** If oil prices fall and stay down, transportation and food-distribution costs could ease. Most Yum! restaurants are run by franchisees, so they feel the savings first. Yum! benefits mainly if franchisees sell more and open new locations. - **A simpler business.** Yum! sold Pizza Hut in China to Yum China in August 2026 and Pizza Hut outside China to LongRange Capital in September 2026, recording a pre-tax gain of about US$1.68 billion in the third quarter. Management can now focus on KFC and Taco Bell. Long-term targets remain 5% average unit growth, 7% system sales growth at constant currency and at least 8% core operating profit growth. **What could hurt** - **Reported earnings are misleading.** The Pizza Hut gain lifted GAAP net income 309% to US$1.62 billion and EPS from US$1.41 to US$5.92\. Excluding special items, EPS fell about 1% to US$1.56\. Use the second number when judging 2027. - **Margins are shrinking.** Taco Bell's operating margin fell from 36.6% to 33.1% year over year. Higher minimum wages or stricter labor rules could add pressure, though many wage rules are set by states and cities rather than Congress. - **Geopolitical exposure.** The Middle East, Turkey and North Africa region is KFC's fastest-growing, but it also carries operational and brand-perception risk if tensions rise. For 2027, the key questions are whether Taco Bell U.S. same-store sales turn positive, whether KFC keeps expanding abroad, and how much efficiency Yum! gains without Pizza Hut. If U.S. consumer pressure continues while costs rise, the post-election gain may not be supported by fundamentals. ## Bottom Line: A Short-Term Sentiment Shift, Not Yet a Proven Rotation Booking, Disney and Yum! Brands are cheap relative to their own histories, and all three rose after the midterms. For now, that move looks like short-term sentiment. A lasting rotation into consumer cyclical stocks would need proof that Congress can help calm geopolitical tension, end the conflict and bring oil prices down. That would ease cost-of-living pressure and support consumer spending. Watch these signals next: 1. **Oil prices and airfares.** Sustained declines would support Booking, Disney's parks and cruises, and Yum!'s costs. 2. **Middle East developments.** Actual de-escalation matters more than political expectations. 3. **Company results.** Booking's fourth-quarter room-night growth, Taco Bell same-store sales, and Disney's park attendance and free cash flow will show whether fundamentals are catching up to prices.