Bank stocks led European markets higher as a landslide victory for Democrats in the US midterm elections removed some of the uncertainty that has weighed on stocks in recent weeks, while lower bond yields also provided a boost.

The Stoxx 600 Banks Index rose as much as 4.5%, on track for its strongest day since May. Heavyweights HSBC Holdings Plc and Banco Santander SA contributed the most to the move, while Lion Finance Group Plc and Raiffeisen Bank International saw the biggest gains, surging 5.9% and 6.4%, respectively. Banking peers in the US were also higher in pre-market trading.

Wednesday’s rally marks a pronounced U-turn after sharp declines for European bank stocks in the runup to the elections. The sector had corrected from an all-time high in early September as a sharp rise in bond yields — in both the US and Europe — raised concerns about credit quality and default rates. The sector is still up 11% year to date.

“Banks were markedly de-risked before the midterms despite strong fundamentals. With no uncertainty left, we are now seeing a strong relief rally,” said Ulrich Urbahn, head of multi-asset strategy and research at Berenberg. “It was a sell-the-rumor, buy-the-fact event.”US Treasury yields fell as the midterm results came in, with investors betting that the new political environment will provide a curb on the Trump administration’s tax and spending plans. Bond yields in the UK, France and Italy also fell.

“The broader view is that if financial conditions become less restrictive and growth becomes more broad-based, that’s good for financials,” said Geoff Yu, a senior macro strategist at BNY. “A steep curve doesn’t help profitability when people are not borrowing and credit risks rise.”