Dow jumps nearly 600 points as the elections remain balanced and the government is divided on the prospect of mixed results
Shares rose Wednesday as markets welcomed an as yet uncertain election suggesting a continued split government regardless of who wins the presidency, with Republicans retaining control of the Senate and Democrats in the house.
By mid-morning, the Dow Jones industrial average rose 600 points, or 2.2%, to over 28,000 points. The Standard & Poor's 500 Index rose nearly 3% to 3,466. And the high-tech Nasdaq rose nearly 4% to 11,596.
After a third straight day of solid gains, the S&P 500 made up its weighted loss of 5.6% last week.
President Trump declared the victory, saying he would take the election to the Supreme Court. It wasn't exactly clear what legal action she could take, but a controversial election was one of the worst scenarios investors had imagined in hopes of ending uncertainty after a long and painful election campaign.
"How much is it really worth when we have a clear enough result?" says Brad McMillan, Director of Investments at Commonwealth Financial Network.
Though multiple states are still contested on the battlefield, Democratic challenger Joe Biden first appeared in Michigan and Wisconsin and could be close to victory by more than half in several key states. - Percentage point to avoid a compulsory recount, he said. . Would.
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Biden has proposed tax hikes and a repeal of President Trump's campaign to reduce environmental and other regulations, but that would also ease trade tensions with China and allow more immigration - benefits for US businesses.
Meanwhile, Republicans are likely to narrowly retain their Senate majority, reducing the likelihood of a strong stimulus package of more than $ 2 trillion that would have shaken the economy further and was favored by Wall Street, Ware says.
Markets can look forward to a $ 1.5 trillion relief move, however, a more likely scenario under Biden or Trump and the Republican-controlled Senate.
Even a Trump victory would likely give the president one more leverage to pressure the Senate into adopting a program that will help unemployed Americans and struggling businesses faster, says McMillan.
At the same time, a Republican Senate means other benefits to the markets, in particular, more modest tax increases, even for companies, than suggested by Biden, provided he is elected. This also points to a lower likelihood of new regulations for tech companies, boosting the Nasdaq.
The market "will have mixed results," said Ware.
Trump or Biden: Who Would Drive Growth and Restore Jobs Faster?
"On the one hand, the tax implications of a Blue Wave / Biden win are a bit of a surprise. On the other hand, Trump is generally viewed as being more market-friendly so you can see him throwing a little positive," he said. explained Innes.
Perhaps most critical, investors wager cautiously that the nation can avoid a competitive race for the presidency.
"They ask," Let's get through the next few days without a constitutional crisis, "said Jason Ware, chief investment officer at Albion Financial Group.By mid-morning, the Dow Jones industrial average rose 600 points, or 2.2%, to over 28,000 points. The Standard & Poor's 500 Index rose nearly 3% to 3,466. And the high-tech Nasdaq rose nearly 4% to 11,596.
After a third straight day of solid gains, the S&P 500 made up its weighted loss of 5.6% last week.
President Trump declared the victory, saying he would take the election to the Supreme Court. It wasn't exactly clear what legal action she could take, but a controversial election was one of the worst scenarios investors had imagined in hopes of ending uncertainty after a long and painful election campaign.
However, that doesn't mean the president has the legal basis to challenge, analysts say.
"How much is it really worth when we have a clear enough result?" says Brad McMillan, Director of Investments at Commonwealth Financial Network.
Though multiple states are still contested on the battlefield, Democratic challenger Joe Biden first appeared in Michigan and Wisconsin and could be close to victory by more than half in several key states. - Percentage point to avoid a compulsory recount, he said. . Would.
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Stay safe and informed about updates on the spread of the coronavirus
Biden has proposed tax hikes and a repeal of President Trump's campaign to reduce environmental and other regulations, but that would also ease trade tensions with China and allow more immigration - benefits for US businesses.
Meanwhile, Republicans are likely to narrowly retain their Senate majority, reducing the likelihood of a strong stimulus package of more than $ 2 trillion that would have shaken the economy further and was favored by Wall Street, Ware says.
Markets can look forward to a $ 1.5 trillion relief move, however, a more likely scenario under Biden or Trump and the Republican-controlled Senate.
Even a Trump victory would likely give the president one more leverage to pressure the Senate into adopting a program that will help unemployed Americans and struggling businesses faster, says McMillan.
At the same time, a Republican Senate means other benefits to the markets, in particular, more modest tax increases, even for companies, than suggested by Biden, provided he is elected. This also points to a lower likelihood of new regulations for tech companies, boosting the Nasdaq.
The market "will have mixed results," said Ware.
"We'll see more of this," says McMillan.
A pedestrian walks past an electronic board displaying stock prices on the Tokyo Stock Exchange in Tokyo on November 4, 2020, as Asian markets respond to early predictions following the US presidential election.Trump or Biden: Who Would Drive Growth and Restore Jobs Faster?
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Most polls had predicted Biden's victory, and many investors took predictions of the so-called "blue wave" of Democratic Party's victories to mean that another big bailout could soon be made to the US economy. With the race too tight, however, some analysts have said they may also feel reassured by the prospect of Trump's pro-market stance continuing."On the one hand, the tax implications of a Blue Wave / Biden win are a bit of a surprise. On the other hand, Trump is generally viewed as being more market-friendly so you can see him throwing a little positive," he said. explained Innes.