US stock futures move higher as election results trickle in
Dow (INDU)futures were last up 181 points, or 0.66%, around 10:15 p.m. ET after swinging between gains and losses earlier in the evening. S&P 500 (SPX) futures were up nearly 1.4%. Nasdaq (COMP) futures surged more than 3%.
Uncertainty is the enemy of markets. Investors are hoping that a decisive winner emerges, sooner rather than later. Crucially, that would mean the nightmare scenario of a contested election is avoided.
In short, election results hinting at a clear winner should boost futures — though several key races remained too early to call just after 10 p.m. ET.
It was not immediately clear what was driving the late night rally.
US stocks posted strong gains during regular trading hours on Election Day.
The Dow closed up 555 points, or 2.1%, higher, its best percentage gain since mid-July. The S&P 500 closed 1.8% higher, its best day in a month. The Nasdaq Composite finished 1.9% higher — its best performance since mid-October.
Hopes for more government spending to help the economic recovery in the near-term boosted markets and riskier investments like stocks. The gains also reflected Wall Street’s bet that former Vice President Joe Biden will win the election.
Analysts at Goldman Sachs (GS) said early Tuesday there’s a good chance the winner will be declared Tuesday night because swing states like Florida, Arizona, Georgia and North Carolina will report results quickly. That certainty would likely be a boost to markets.
A Trump win would likely mean less fiscal stimulus and, thus, slower economic recovery, according to Kristina Hooper, chief global strategist at Invesco.
“That environment could still be supportive of stocks given massive monetary stimulus, but it would likely favor defensives and secular growth, and the tech sector is the poster child for secular growth,” Hooper told CNN Business.
Investors concerned about the likelihood of additional stimulus are also closely watching the results in the race for control of the US Senate. If Democrats appear poised to retake control of the Senate, that could pave the way to robust fiscal stimulus and infrastructure spending — two things markets crave. However, it could also lead to higher taxes that would cut into corporate profits.
— CNN’s Matt Egan and Anneken Tappe contributed to this report.
