Why Centene And Tenet Stocks Jumped
Part of our midterms guide. Start here: what the vote really changes for your money.
What Does Everyone Already Know?
Democrats took both chambers of Congress; both were projected by early Wednesday. Nasdaq-100 futures fell about 2% overnight, then the market turned: on Wednesday the Dow closed up about 3%, roughly 1,570 points, and the S&P 500 and Nasdaq rose more than 1%.
Democrats don’t have a filibuster-proof Senate, and President Trump still has his veto. Wall Street’s word for that is gridlock, and it’s what several strategists were cheering by the open.
Did Our Pre-Vote Calls Work?
On Monday we published three calls: three stocks that could pop if Democrats won, a GEO Group swing, and a sector map. Here’s the scorecard, using Wednesday’s closing moves.
| Our call | What we said | Move, Wed close | Verdict |
|---|---|---|---|
| Centene (CNC) | Could pop | +12.6% | Right |
| Tenet (THC) | Could pop | +9.6% | Right |
| Oscar (OSCR) | Could pop | +8.6% | Right |
| GEO Group (GEO) | Big swing, no lasting 30% loss | opened −6.8%, closed −1.9% | Right so far |
| Sector map | Health care up; defense, investment banks, AI power down | Health up, defense and power down, banks up | Mostly right |
All five calls pointed the right way. But the reason we gave for the first three was wrong.
We said Oscar, Centene and Tenet would pop because they were the worst hit by the health-care cuts, and “those losses are already in the share prices.” Our own data says they weren’t. At Tuesday’s close, Centene was up 96% over 12 months and just 5% below its 52-week high; Oscar was up 84% and 6% below its high; Tenet was up 32% and 5% below its high. These weren’t beaten-down stocks. Investors may have been buying the Democratic win for months, which makes sense with betting markets at about 93% to 95% for the House. The stocks still popped, but the next leg needs a deal, not a vote.
See more lines: the details behind each verdict
Health care. HCA, a hospital name we didn’t pick, did better than two of our three: about +10%. Molina was up about 9% and Universal Health about 11%. UnitedHealth was up about 1% and Elevance about 5%. Bernstein called the result positive for Medicaid and Obamacare insurers (Centene, Molina, Elevance) and less so for UnitedHealth. Tenet’s move also follows a third quarter that beat estimates and a higher full-year profit outlook, so not all of it is the vote.
GEO and CoreCivic. GEO opened down about 7%, near $26, then closed down about 2%, at $27.53; CoreCivic closed down about 1.5%. GEO was already down 10% in the month before the vote. It reports third-quarter results this morning, with a call at 1 p.m. ET. That is the next real test of our call.
Sectors. Right: defense fell (Northrop about −5%, Lockheed and L3Harris about −6% to −7%, RTX about −3%), and the power companies building for AI data centers fell hard (Vistra about −14%, Constellation about −7% and GE Vernova about −9%). Wrong: we expected investment banks and brokers to lag, and Bank of America was up about 4%. Not on our map: solar jumped, the Invesco Solar ETF about +6% and First Solar about +5%. Musk names, our top risk in the megacap ranking, fell: Tesla about −3% and SpaceX about −4%.
Did Any Company’s Earnings Change Overnight?
None because of the vote. Nothing a new Congress does takes effect before its term starts on Jan. 3, and almost nothing takes effect without the President’s signature. The real earnings news overnight was about AI, not politics: AMD rose about 7% after hours on a beat, and Arista and Super Micro jumped on strong outlooks. By Wednesday’s close, AMD was up 1% and Arista 5%, and Super Micro was down 6%.
So Wednesday’s moves on the vote are bets on what the new Congress might win later. Here is what it can and can’t do on its own:
| The lever | Can Democrats do it alone? | When it matters |
|---|---|---|
| Restore Obamacare subsidies | No: needs Trump’s signature | The 2027 debt-limit deal |
| Claw back detention money | No: the 2025 law already paid for it | Future budgets only |
| Trim the defense request | Partly: Congress writes budgets | The next spending bills |
| Hearings and subpoenas | Yes | From January |
| Repeal tariffs or the 2025 tax law | No: veto | Not before 2029 |
Congress can investigate, budget and bargain. It can’t legislate past a veto.
Analysts expect the $1.5 trillion defense request to come in short. BNP Paribas says Democrats may lack the votes to restore the big Obamacare provisions, but could win concessions in budget talks. The biggest of those talks is the debt limit, which the U.S. is expected to hit between late winter and mid-summer 2027. That’s where today’s health-care rally gets paid, or doesn’t.
What Does The Market Expect Next?
Calm, if history holds. Since 1980, the S&P 500 has risen about 0.2% on average the day after an election and about 1.1% over the next month; it was higher a year later after each of the last 11 midterms, by about 13.7% on average. The one place where the result did change the outlook is AI data centers, and the reason is in the states, not Congress. Texas elected a governor who wants to pause new data centers, and Texas has about 27% of the country’s planned data-center power. We take that up in Can Democrats Slow The $800 Billion AI Boom?
What Should You Do This Week?
1. If a policy pop pushed a position past your plan, trim it back. Say you hold Centene at a 4% target weight and the last year’s run took it to 6%. Wednesday’s move came from a vote, not from earnings, and the payoff depends on a deal Trump would have to sign. Trimming back to target locks in part of the run without betting against the story. The risk: if a subsidy deal comes early, you sold some of the upside.
2. If you wanted Centene but not after a 13% jump, commit at a lower price. At Wednesday’s close, with Centene at $76.01, a $60 put expiring June 17, 2027, about seven months out, sold cash-secured pays about $3.13 a share (midpoint of the bid and ask), for an effective entry of about $56.88, some 25% below that close. Per contract you set aside $6,000 and collect about $313. The risk: if Centene falls well below $60, you still buy at $60, and the loss below that is yours.
3. Don’t trade GEO on the headline. It reports this morning, before the open. The vote didn’t change the detention money already approved; the earnings call will tell you whether contracts are still growing. That’s the thesis to check, not Wednesday’s price.
This is education, not personal advice; options aren’t right for every account.
What’s The Bigger Idea?
We call it Sell the thesis, not the price. On days like Wednesday, prices move on what might happen, while the businesses stay exactly where they were on Tuesday. A falling price tells you what other people expect; a changed business tells you something about the company. Before you buy the pop or sell the drop, write one line: what changed in this company’s earnings? On Wednesday, for every stock in our scorecard, the honest answer was nothing yet.
We got the direction right and the reason wrong. Insurers and hospitals popped, GEO swung, defense and AI power lagged. But our three picks likely rose because investors expected the win, not because they were beaten down. No earnings changed overnight; the payoff, if it comes, most likely comes from the 2027 debt-limit deal.
What Should You Ask Next?
- Will Democrats slow the AI data center boom? Why a governor’s race moved AI stocks more than Congress.
Follow this story with us: we’ll score these moves again at Friday’s close and tell you which ones held.
Did Tuesday Change Your Plan?
Elections change the odds, not your plan. If you have $1 million or more invested, see what Tuesday means for your portfolio in a free 15-minute call with a Trefis partner firm.
For questions about this article or underlying research, email help@trefis.com.