Biotech stocks rallied on the news that Republicans would control both the White House and Capitol Hill, buoyed by the perception that a ruby-red federal government won’t take action to rein in high drug prices.

As Donald Trump’s victory slowly unfolded on Tuesday night, global markets initially plummeted, then calmed. And by Wednesday, that calm had turned to downright optimism for drug company stocks: The Nasdaq biotech index finished the day up 9 percent. Individual pharmaceutical stocks also rallied: By the market close, Pfizer (PFE) was up 7 percent and Merck up 6 percent.

And European-based pharmaceutical companies Roche (RHHBY), Sanofi (SNY), and Novo Nordisk (NVO) A/S each closed the day up by 4 percent or more in foreign markets.

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Trump has called for Medicare to be able to negotiate drug prices, which the pharmaceutical industry opposes, but he is largely seen as a black box when it comes to cracking down on prescription drug prices. He is certainly expected to be less aggressive than his defeated opponent Hillary Clinton, who pledged during the campaign to set up a federal task force to evaluate proposed price hikes — and who repeatedly sent biotech stocks plunging with tweets decrying high drug prices.

“The market has fretted about the prospect of a Clinton presidency and what that may mean for drug pricing,” British investment manager Neil Woodford wrote in a blog post on Wednesday. “Now the outcome is known, the prospect of drug pricing legislation is off the agenda.”

And in a survey of investor clients reported in a note on Wednesday, the equities research firm Evercore ISI found that 80 percent anticipate that impactful drug pricing reform will be effectively off the table during Trump’s presidency.

And Trump’s unexpected victory wasn’t the only win for the drug industry. In California, voters rejected a ballot initiative that would have enacted price controls on drugs paid for by some state health plans. The drug industry spent at least $109 million to defeat the measure.

The picture was less rosy for publicly traded hospital companies.

Trump has called for repealing the Affordable Care Act, which could affect health care organizations. And on Wednesday, Republican Senate Majority Leader Mitch McConnell said Congress would move quickly to repeal the healthcare law under Trump’s administration.

Sheryl Skolnick, an analyst at Mizuho Securities, downgraded all the hospitals she covers in a note Wednesday, saying that “the worst possible outcome for health care stocks is a reality.”

When the market closed, the hospital chain Tenet Healthcare (THC) was down 25 percent, the acute care hospital operator Community Health Systems (CYH) was down 22 percent, and the hospital operator HCA Holdings was down 11 percent.

This story has been updated with the prices of healthcare stocks as of Wednesday’s market close.

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