The S&P 500 rose solidly on Tuesday as traders awaited the results from a high-stakes U.S. presidential election.
The broad market index gained 1%, and the Nasdaq Composite advanced 1.1%.
The SPDR S&P Bank ETF (KBE) gained 1%.
Traders are pricing in a 99% likelihood of a quarter-point cut following September’s half-point reduction, according to CME Group’s FedWatch Tool.
The S&P 500 is already up more than 20% year to date, an unusually strong run up ahead of an election, and is about 2% from its record high.
As traders awaited the outcomes of a high-stakes U.S. stock market test, the SandP 500 appreciated steadily on Tuesday. S. . election of the president.
One percent was gained by the Nasdaq Composite and one percent by the broad market index. The Dow Jones Industrial Average increased by 333 points, or 0.8 percent.
It is anticipated that the contest between former President Donald Trump and Vice President Kamala Harris will be fierce. There is still a lot of interest in determining which party controls Congress because a Republican or Democratic sweep could lead to significant changes in taxation or spending. (Go here to follow CNBC’s live blog for the 2024 election. ).
Investors may want to prepare for some short-term choppiness, but the outcome could have a big impact on where stocks finish the year. The major averages, according to CNBC data dating back to 1980, tend to rise from Election Day to the end of the year, but they usually decline during the session and the week that follows. The market may become even more shaky if the outcomes are uncertain.
On Tuesday, stocks showed no obvious election wagers. It seemed to be a broad rally for Wall Street instead.
There has been a lot of preparation for possible drama and uncertainty coming from Washington. We have witnessed that. And now that Election Day has arrived, we’re hoping that some of that may settle down,” said Ryan Detrick, Carson Group’s chief market strategist.
According to Detrick, “the truth is that whoever is handed the keys to the White House, if you will, is going to be entering a car that’s in pretty good shape — an economy that’s in pretty darn good shape.”.
Under GOP control, banks, which would profit from deregulation, were marginally higher. KBE, the SPDR S&P Bank ETF, saw a 1% increase. Nvidia’s stock increased 3%, but the chipmaker and bull market mainstay seems to be safe no matter how the election turns out. Given CEO Elon Musk’s close ties to Trump, it is possible that the electric car company would benefit from a Republican or Democratic victory, but Tesla’s stock increased 4%.
In addition to the election, investors are anticipating the Federal Reserve’s November rate decision, which is due on Thursday, and new remarks from Chair Jerome Powell regarding the central bank’s future policy actions. According to CME Group’s FedWatch Tool, traders are pricing in a 99 percent chance of a quarter-point cut after the half-point cut in September.
The S&P 500 is just 2% below its record high and has already risen more than 20% this year, which is an exceptionally strong run-up before an election.
