New York: US stock indexes are ticking higher Tuesday as voters head to the polls on the last day of the presidential election.
US Stock Market
The S&P 500 was up 0.4 per cent in early trading, inching closer to its record set last month. The Dow Jones Industrial Average was up 66 points, or 0.2 per cent, as of 9.35 am Eastern time, and the Nasdaq composite was 0.6 per cent higher.
Excitement about the artificial-intelligence boom helped lift Wall Street, as it has for much of the last year. Software company Palantir Technologies jumped 16.7 per cent after delivering bigger profit and revenue than analysts expected for the latest quarter.
It’s an industry known for thinking and talking big, and CEO Alexander Karp said, “We absolutely eviscerated this quarter, driven by unrelenting AI demand that won’t slow down.” Boeing was edging up by 0.1 per cent after its factory workers who had been on strike voted to accept the aerospace giant’s latest contract offer. The ratification clears the way for Boeing to restart Pacific Northwest assembly lines that the walkout idled for 53 days and resume production of its bestselling airliner.
They helped offset a 5.2 per cent drop for Wynn Resorts after the casino operator’s results for the latest quarter fell short of analysts’ forecasts.
The main event, though, is the election, even if the result may not be known for days, weeks or months as officials count all the votes. Such uncertainty could upset markets, along with an upcoming meeting by the Federal Reserve on interest rates later this week. The widespread expectation is for it to cut its main interest rate for a second straight time.
Despite all the uncertainty heading into the final day of voting, many professional investors suggest keeping the focus on the long term and what corporate profits will do over the next few years and a decade. Stocks have historically tended to rise regardless of which party wins the White House.
The S&P 500 has risen in 73 per cent of the years where a Democrat was president and 70 per cent of the years when a Republican was the nation’s chief executive, from 1945 through late last month, according to Sam Stovall, chief investment strategist at CFRA.
The US stock market has tended to rise more in magnitude when Democrats have been president, in part because a loss under George W. Bush’s term hurt the Republican’s average. Bush took over as the dot-com bubble was deflating and exited office when the 2008 global financial crisis and Great Recession were devastating markets.
Besides who will be president, other questions hanging over the market include whether the White House will be working with a unified Congress or one split by political parties, as well as whether the results will be contested.
The general hope among investors is often for split control of the US government because that’s more likely to keep the status quo and avoid big changes that could drive the nation’s debt much, much higher.
As for a contested election, Wall Street has some precedence to look back to. In 2000, the S&P 500 dropped 5 per cent in about five weeks after Election Day before Al Gore conceded to George W. Bush. That, though, also happened during the near-halving of the S&P 500 from March 2000 to October 2002 as the dot-com bubble deflated.
Four years ago, the S&P 500 rose the day after polls closed, even though a winner wasn’t clear yet. And it kept going higher even after former President Donald Trump refused to concede and challenged the results, creating plenty of uncertainty. A large part of that rally was due to excitement about the potential for a vaccine for COVID-19, which had just shut down the global economy.
In the bond market, the yield on the 10-year Treasury rose to 4.31 per cent from 4.29 per cent late Monday.
In stock markets abroad, indexes were mixed in Europe and Asia. The moves were mostly modest outside of jumps of 2.3 per cent in Shanghai and 2.1 per cent in Hong Kong.
