NEW YORK: Wall Street’s main indexes rose on Tuesday in a broad rally, but investors still braced for volatile trading over the next few sessions as voting began in a tightly contested US presidential election.
The final outcome could take days as opinion polls in the campaign’s final days showed the contest between Republican Donald Trump and Democrat Kamala Harris was too close to call.
The former president’s odds improved in betting markets, which many investors have been following for any indication on the election outcome.
On the voting day, volatility was more noticeable in bonds and currency markets. Equity markets were largely calm against the backdrop of an optimistic long-term outlook underpinned by corporate earnings and economic data.
The VIX, an index of Wall Street volatility, eased to 20.24, well below levels seen during the 2020 election and the two-month high it hit last week.
All 11 sectors in the S&P 500 gained, with Industrials , Consumer Discretionary and Information Technology adding more than 1.3%.
“Some strength on election day is nothing new...the services number today was quite solid and the bottom line is the economy remains quite strong,” said Ryan Detrick, chief market strategist at the Carson Group.
US services sector activity showed a surprise rise in October to a more than two-year high and employment strengthened, according to the Institute for Supply Management’s non-manufacturing PMI index.
Investors are also keeping an eye on Congressional elections to determine the balance of power in Washington. Many analysts predict a split government, which would limit the ability of the President to enact significant policy changes.
Stocks viewed as bets on a win for the former president jumped, with Trump Media & Technology Group surging 14.4% and prison operator Geo Group gaining 6%.
Crypto stocks tracked bitcoin to rise as Trump has positioned himself as friendly to the sector. Megacap growth stocks gained, with Tesla rising 4%, and Nvidia up 3.1%, while economically sensitive small caps rose 1.1%.
The Dow Jones Industrial Average rose 326.12 points, or 0.78%, to 42,120.72, the S&P 500 gained 59.24 points, or 1.04%, to 5,771.93 and the Nasdaq Composite gained 245.09 points, or 1.35%, to 18,425.07.
Palantir soared 23% to a record high after the data analytics firm raised its annual revenue forecast for the third time.
Shares of Boeing, which had risen before the bell following the end of a prolonged workers’ strike, edged 0.8% lower. The Federal Reserve’s November policy meeting will start on Wednesday. While markets are betting on a 25-basis point cut to interest rate, the outlook for future easing has grown uncertain as data points to a strong economy.
Advancing issues outnumbered decliners by a 2.95-to-1 ratio on the NYSE and by a 2.18-to-1 ratio on the Nasdaq.
The S&P 500 posted 19 new 52-week highs and six new lows while the Nasdaq Composite recorded 75 new highs and 88 new lows.
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