NEW YORK (Reuters) - Most major stock markets rose on Wednesday, led by a strong rally on Wall Street, after the outcome of the U.S. midterm congressional elections drove expectations of political gridlock in Washington, boosting risk assets and weighing on the dollar.

Tuesday’s vote delivered a split U.S. Congress, with Democrats seizing control of the House of Representatives and Republicans strengthening their majority in the Senate.

U.S. oil prices fell 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 the tax cuts and financial deregulation measures that have already been enacted.

That view helped Wall’s Street three major equity indexes rally, with traders piling into technology and healthcare stocks. [.N]

“I don’t think any of Trump’s agenda that he’s already accomplished gets unwound. That was the main point of concern for investors,” said Robert Phipps, a director at Per Stirling Capital Management in Austin, Texas. “We’ve got a relief rally because the market got exactly what it expected.”

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.

After the closing bell, the Dow Jones Industrial Average .DJI rose 545.29 points, or 2.13 percent, to 26,180.3, the S&P 500 .SPX gained 58.44 points, or 2.12 percent, to 2,813.89 and the Nasdaq Composite .IXIC added 194.79 points, or 2.64 percent, to 7,570.75.

Cannabis-related shares rallied as voters in several U.S. states approved ballot initiatives approving marijuana use, while the resignation of U.S. Attorney General Jeff Sessions, who has openly opposed legalization, gave investors a further boost.

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The pan-European STOXX 600 index .STOXX rose 1.06 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 1.53 percent.

The U.S. Federal Reserve began a 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.

By Wednesday afternoon, the focus was turning to the Fed and the decision of its policy-setting Federal Open Market Committee expected at the close of its meeting on Thursday.

“I think traders are squaring positions ahead of tomorrow’s FOMC decision,” said John Doyle, vice president of dealing and trading at Tempus Consulting.

The dollar index .DXY fell 0.12 percent, with the euro EUR= unchanged at $1.1426.

U.S. Treasury yields fell, but cut their decline after a record high amount of 30-year government bonds was met with weak demand.

The Treasury yield curve touched its flattest in over a month US2US10=TWEB. Benchmark 10-year notes US10YT=RR last fell 6/32 in price to yield 3.2373 percent, from 3.215 percent late on Tuesday.

US dollar, Treasury yields fall after mid-term elections - tmsnrt.rs/2PdgZRY

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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 .SSEC closed 0.7 percent lower, while Hong Kong stocks ended up 0.1 percent. .HSI [EMRG/FRX]

Emerging market stocks rose 0.57 percent. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.61 percent higher, while Japan's Nikkei .N225 closed down 0.3 percent.

The dollar's weakness lifted other currencies. Sterling GBP= was last at $1.3128, up 0.24 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 0.74 percent versus the U.S. dollar, recently trading at 19.86.

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 0.96 percent to $61.61 per barrel and Brent LCOc1 was last at $72.02, down 0.15 percent on the day.

Spot gold XAU= added 0.1 percent to $1,226.56 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.