* WTI crude falls after U.S. output hits new record
* Dollar index down, U.S. yields fall on stimulus doubts
* Interactive chart on U.S. midterms https://tmsnrt.rs/2D6XH9t
By Hilary Russ and Rodrigo Campos
NEW YORK, Nov 7 (Reuters) - Most major stock markets rose on Wednesday after the U.S. midterm election divided control of Congress, while expectations of political gridlock in Washington weighed on the dollar.
U.S. oil prices slipped after U.S. crude output hit another record high.
While gridlock could hamper President Donald Trump's political and economic agenda, few analysts expect a reversal of tax cuts and financial deregulation measures that have already been enacted.
That view helped all three Wall Street equity indices rally, with traders piling into technology and healthcare stocks. .N
"I think it is more just relief that the election has come and gone, no surprises, no tail-risk outcome occurred. Gridlock is fine, let's get on with things and worry about the fundamental issues like earnings, the (Federal Reserve)," said David Joy, chief market strategist at Ameriprise Financial (NYSE:AMP) in Boston.
Still, a split Congress could hamper Trump's push for a further round of tax cuts and deregulation, measures that have supercharged the U.S. economy, stock markets and the dollar.
The Dow Jones Industrial Average .DJI rose 423.38 points, or 1.65 percent, to 26,058.39, the S&P 500 .SPX gained 43.11 points, or 1.56 percent, to 2,798.56 and the Nasdaq Composite .IXIC added 152.67 points, or 2.07 percent, to 7,528.63.
The pan-European STOXX 600 index .STOXX rose 1.06 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.43 percent.
The U.S. Federal Reserve starts its two-day monetary policy meeting on Wednesday, and it is expected to keep interest rates unchanged. A rate hike in December is largely priced in.
"The policy path implied by this outcome shifts the narrative away from rising rates at least temporarily," Morgan Stanley (NYSE:MS)'s Michael Zezas wrote in a client note.
That view pushed the dollar lower against a basket of currencies. The dollar index .DXY fell 0.31 percent, with the euro EUR= up 0.24 percent to $1.1453.
U.S. Treasury yields fell, but cut their decline after a record high amount of 30-year government bonds was met with weak demand. 10-year notes US10YT=RR last rose 3/32 in price to yield 3.2022 percent, from 3.215 percent late on Tuesday.
Attention will now focus on Trump's hard line on trade tariffs, which he can impose without congressional approval. That keeps alive worries about a trade war between China and the United States.
Chinese shares closed 0.7 percent lower, while Hong Kong stocks ended up 0.1 percent. .HSI EMRG/FRX
Emerging market stocks lost 0.01 percent. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.51 percent higher, while Japan's Nikkei .N225 lost 0.28 percent.
The dollar's weakness lifted other currencies. The Japanese yen strengthened 0.04 percent versus the greenback at 113.40 per dollar, while sterling GBP= was last at $1.3138, up 0.31 percent on the day.
The Mexican peso MXN= rose overnight as the U.S. election results showed a Democratic majority in the House, but later fell as traders cashed in following four sessions of gains.
The Mexican peso lost 0.84 percent versus the U.S. dollar, recently trading at 19.89.
U.S. oil prices continued a recent slide after domestic inventories rose more than expected, adding to over-supply concerns as U.S. crude output hit another record high. O/R
U.S. crude CLc1 fell 0.56 percent to $61.86 per barrel and Brent LCOc1 was last at $72.24, up 0.15 percent on the day.
Spot gold XAU= added 0.1 percent to $1,227.22 an ounce, having earlier hit a high of $1,235.83, while U.S. gold futures GCcv1 settled up $2.40, or 0.20 percent, at $1,228.70.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ US dollar, Treasury yields fall after mid-term elections
https://tmsnrt.rs/2PdgZRY Interactive chart on U.S. midterms
https://tmsnrt.rs/2D6XH9t
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>