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Dow gains 550 points on Election Day as Wall Street extends rally

The Washington Post logo The Washington Post 11/3/2020 Taylor Telford
a large stone building: The Senate side of the U.S. Capitol is seen on the morning of Election Day, Tuesday, Nov. 3, 2020, in Washington. (AP Photo/J. Scott Applewhite) © J. Scott Applewhite/AP The Senate side of the U.S. Capitol is seen on the morning of Election Day, Tuesday, Nov. 3, 2020, in Washington. (AP Photo/J. Scott Applewhite)

U.S. markets rose on Election Day as investors expressed optimism that a clear winner would emerge in the presidential race, fanning hopes for economic stimulus.

Tumult reigned in trading last week, with U.S. indexes having their worst week since March as the U.S. shattered records for new coronavirus cases and several European nations reintroduced lockdowns. But on Tuesday, the markets built on Monday’s gains, as upbeat investors react to projections of a blue wave, Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, said in comments emailed to The Post.

“Currently the consensus is that a Blue Wave (Democrats hold the House and win the Senate and White House) scenario will lead to a much larger stimulus package next year,” Zaccarelli wrote, “which would be good for the stock market in the short run, despite the fact that it will also lead to higher corporate and personal income taxes.”

Analysis: With hours until polls close, here are the data that will shape the night

For the first time in history, more than 100 million Americans cast their ballots before Election Day. The massive increase in early and mail voting, with many voters seeking to avoid crowded polling places, has reshaped how and when most ballots are counted, creating uncertainty around when results will be known. According to The Washington Post’s average of national polls, as of Tuesday evening, Democratic nominee Joe Biden led President Trump 52 percent to 42 percent. The former vice president held a bigger lead than Hillary Clinton had in 2016, before her surprise loss to Trump.

After popping 300 points at the open, the Dow Jones industrial average closed the day up more than 550 points, slightly more than 2 percent, at 27,480. The S&P 500 index closed up more than 1.8 percent at 3,369. The tech-heavy Nasdaq 100 — battered by the recent steep sell-offs in Big Tech — rose 1.8 percent to 11,160.

Analysis: Now more than ever, the stock market is not the economy

The optimism was shared overseas. Asian markets all closed in positive territory, with Hong Kong’s Hang Seng Index and the Australian ASX 200 both gaining nearly 2 percent. Japan’s Nikkei 225 and the Shanghai Composite index both climbed about 1.4 percent. In midday trading, European indexes were all positive, led by France’s CAC and Britain’s FTSE 100, which were both up more than 2.3 percent.

“It’s a firm risk-on mood for investors as equities rise across Europe and Asia,” Russ Mould, investment director at AJ Bell, said in Tuesday comments emailed to The Post. “Investors seem to be pricing in a victory by Joe Biden in the US Presidential Election and anticipation is high that he will have a more favorable trade policy with China and the EU.”

Chinese regulators announced Tuesday the suspension of financial tech giant Ant Group’s $37 billion public offering, which was scheduled for Thursday and was expected to be the world’s biggest IPO. In a statement, the Shanghai stock exchange cited “major issues” that might cause it “not to meet the listing conditions or disclosure requirements” following a meeting with Jack Ma, the company’s billionaire co-founder. Ant Group is the financial arm of e-commerce giant Alibaba.

Investor ease was reflected in the yield on the 10-year U.S. Treasury note, which edged up to 0.888 percent Tuesday morning, nearing its highest level since June as investors seek out riskier territory. Bond yields move inversely to prices.

Wall Street rebounds from last week’s rout, with Dow up more than 400 points

Even oil markets, which have been choppy as renewed movement restrictions spur fears of wider lockdowns, were steady Tuesday. Brent crude, the international oil benchmark, was trading up 2.67 percent at $40.01 per barrel. West Texas Intermediate crude, the U.S. oil benchmark, was trading up 2.8 percent at $37.84 per barrel.

The rally reflects a hunger for change amid the ongoing public health crisis and the uneven economic recovery, Chris Rupkey, chief financial economist at MUFG Union Bank, said Tuesday in comments emailed to The Post.

“History is repeating itself where four years ago, the Dow industrials rallied Monday and Tuesday into the presidential election on November 8, and now stocks are up Monday and Tuesday again this year before the election results start to trickle out after the close of trading today,” Rupkey wrote. “Stocks are rallying today in hopes of a better tomorrow.”

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