Broad gains lift S&P 500 as traders coalesce around Trump victory
Tuesday saw the S&P 500 rise significantly in a broad stock market rally as traders awaited results from the closely watched US presidential election, reported CNBC.
The benchmark index rose 1.23 percent, closing at 5,782.76. The Nasdaq Composite advanced by 1.43 percent to 18,439.17, and the Dow Jones Industrial Average gained 427.28 points, or 1.02 percent, ending at 42,221.88.
The election was a tight contest between former President Donald Trump and Vice President Kamala Harris, with significant attention on Congressional control. Trump emerged victorious in the early hours of Wednesday morning, with pre-market trading pointing to another rally.
A clear victory for either Republicans or Democrats was anticipated as potentially driving substantial changes in spending or tax policies.
CNBC highlighted that, historically, the major averages tend to rise from Election Day through the end of the year, though market dips often occur immediately following the results.
Tuesday’s rally, however, did not show specific election-driven bets, reflecting instead a general upswing on Wall Street.
Ryan Detrick, chief market strategist at Carson Group, commented, “There’s been a lot of hedging against potential uncertainty, potential drama out of Washington. We’ve seen that. And now as we’re at Election Day, we kind of are optimistic that maybe some of that can unwind.”
Detrick added, “The reality is whoever is given the keys to the White House, if you will, is going to be taking on a car that’s in pretty good shape — an economy that’s in pretty darn good shape.”
Banks, which could benefit from deregulation under a Republican-led government, saw slight gains, with the SPDR S&P Bank ETF (KBE) increasing by 1.6 percent.
Nvidia shares climbed nearly 3 percent, reflecting resilience regardless of the election’s outcome. Tesla rose 3.5 percent, bolstered by bipartisan support given CEO Elon Musk’s association with Trump.
Investors also looked ahead to the Federal Reserve’s November rate decision scheduled for Thursday, which will include new commentary from Chair Jerome Powell on monetary policy.
According to CME Group’s FedWatch Tool, traders are pricing in a 98 percent chance of a quarter-point cut following the September half-point reduction.
The S&P 500 has surged more than 21 percent this year, an unusual pre-election rally that places it near a record high.
