Jakarta. Indonesian stocks climbed 1.6% to 4,998 on Thursday morning, gaining 78 points as investors weighed the potential economic implications of the US midterm election results and awaited Indonesia’s third-quarter economic growth data.

Jakarta Composite Index (JCI) moved within a range of 4,995 to 5,038 in early trading. According to RTI data, 1.49 billion shares had changed hands in the opening minutes, with a total transaction value of Rp 519.53 billion ($28.71 million) across 51,342 transactions. A total of 353 stocks advanced, 102 declined and 122 remained unchanged.

Phintraco Sekuritas said the Democratic Party’s victory in the US midterm elections, which secured a majority in both the House of Representatives and the Senate, could reshape the policy dynamics under President Donald Trump, particularly regarding fiscal policy, international trade and geopolitical relations.

The result could constrain Trump’s economic agenda, including his trade tariff policies, potentially affecting global growth prospects, the US dollar’s direction and financial market sentiment, the brokerage said.

“However, the Federal Reserve’s monetary policy direction will still be determined by inflation and labor market conditions,” Phintraco Sekuritas said.

Domestically, investors are also awaiting Indonesia’s third-quarter GDP data, scheduled for release on Thursday. The economy is projected to expand 1.3% quarter-on-quarter (QoQ) in the July-September period, slowing from 3.73% QoQ in the second quarter.

On an annual basis, economic growth is forecast to reach 5.2% year-on-year (YoY), slightly easing from 5.29% in the previous quarter.

Phintraco Sekuritas warned that growth falling short of expectations could weigh on market sentiment by reinforcing concerns over an economic slowdown and the earnings outlook for listed companies.

“Conversely, stronger-than-expected growth could serve as a positive catalyst for the market and strengthen investor confidence in the resilience of domestic economic fundamentals,” the brokerage said.

Meanwhile, Pluang Research said in a report on Thursday that the rally in US Big Tech stocks following the Democrats’ victory reflected a shift in how investors assess hyperscalers.

Over the past few weeks, investors had punished Amazon, Alphabet and Meta over their massive artificial intelligence (AI) spending, which had pushed free cash flow into negative territory and forced the companies to seek funding through debt and equity.

The Democrats’ election victory, following a campaign that included calls to restrict data center development, was interpreted by the market as an external brake on spending. This could allow companies to slow their investments without having to acknowledge that they had expanded too aggressively, Pluang Research said.

“We believe the rally remains speculative because no regulations have changed yet. However, the message is clear: the market now places greater value on spending discipline and free cash flow recovery than on unlimited expansion,” Pluang said.

“Under these conditions, we see companies with strong core businesses and the ability to generate substantial cash flow as attractive options. Amazon has cash flow engines from AWS and retail, Meta from its advertising business, and Apple from its product ecosystem without the same level of AI spending burden as its peers. Volatility is likely to remain high, so we recommend entering the market gradually,” it added.

On Wall Street, US stocks closed sharply higher on Wednesday. The S&P 500 rose 1.6%, while the Dow Jones Industrial Average surged 1,569 points to its highest level in two months. The Nasdaq Composite gained 1.4%.

Across regional markets as of 10:15 a.m. Jakarta time, Japan’s Nikkei 225 fell 0.44%, while South Korea’s Kospi dropped 3.52%. Hong Kong’s Hang Seng Index advanced 3.15%, and the Shanghai Composite Index added 0.16%.

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