Stock Market Today: What investors are watching as Election Day results begin to pour in - MarketWatch

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Nov. 5, 2024 at 7:59 PM EST

Election Day 2024: Trump and Harris face off in historic presidential race with inflation, stocks and the economy in focus

Stock-market investors should treat Trump and Harris election playbooks with caution

Brokerages are raking in millions from your presidential election bets

Some traders see opportunity in Wall Street’s election-related anxiety.

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18 min ago

By

William Watts

Stock-index futures were creeping higher, with the U.S. dollar also firming versus major rivals as very early election results begin to come in, including from key swing states Georgia and North Carolina.

Futures on the Dow were up 0.6%, while S&P 500 futures gained 0.4% and Nasdaq-100 futures gained 0.2%. The ICE U.S. Dollar Index, a measure of the currency against a basket of six major rivals, was flat after an earlier dip.

Donald Trump had 61% of the vote in Georgia with around 13% of ballots counted, while Kamala Harris had 67.5% of the vote in North Carolina with 2% of results in, according to CNN. While still very preliminary, the market may be taking some comfort from Trump's showing in Georgia, a state he lost to Joe Biden in 2020, said Kathleen Brooks, research director at London-based XTB, in a note.

"We think that financial markets were wiping the slate clean on Tuesday, and that the real moves will happen once we have a better idea of who will win the election," she wrote. "The positive signs for Trump in Georgia is already boosting the dollar, and it suggests that USD is very sensitive to the results as they get announced."

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59 min ago

By

William Watts

Polls are beginning to close, with the Associated Press calling a handful of states. But there's no news yet from major swing states that will likely determine the race. Keep up with the state-by-state calls here.

1 hour ago

By

Vivien Lou Chen

The ICE U.S. Dollar Index has the potential to trade either above 107 or below 100, depending on the results of Tuesday's presidential election, according to strategist Kit Juckes of Societe Generale.

In a note, Juckes described a potential win by Vice President Kamala Harris, without a clean sweep of Congress, as being "dollar unfriendly.'' Meanwhile, "the dollar likes the idea of [former] President Trump's fiscal plans,'' which include tax cuts, he said.

"My best guess is we trade at 100 or 107 if we get a clear outcome reasonably quickly," Juckes said. The chart below shows how the index has performed in the past six months.

1 hour ago

By

William Watts

Proxies for former President Donald Trump's trade policies — specifically bitcoin and the Chinese yuan — can help gauge what market participants are making of the election results, Julian Emanuel, strategist at Evercore ISI, said in a note.

Analysts and investors have flagged that the foreign-exchange market, given its depth and liquidity, will likely be the most sensitive to perceptions around the election outcome. The performance of the yuan and the Mexican peso are both expected to be closely watched.

The Cboe Volatility Index, a gauge of expected S&P 500 volatility over the coming 30 days, will offer a clearer signal when U.S. trading gets under way Wednesday morning, Emanuel said. Uncertainty over the outcome could see the VIX soar toward 38, while an outcome seen as "clean" could send it toward 15. The index's long-term average stands near 20. It fell back to around 20.50 on Tuesday.

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2 hours ago

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William Watts

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Pity the winner? Burgeoning debt levels could stoke a crisis for whoever prevails in Tuesday's close-fought presidential election, warned Bob Savage, head of markets strategy and insights at BNY, in a note.

"In many ways the 2024 election may be over, but the 2028 one is just starting as that will be the time that spending and debt service truly collide," he wrote. The cost of servicing the U.S. debt has risen from 2% when rates were near zero to more than 15% now -- and the history of compound interest costs makes clear that doubling the size of the debt in less than seven years means trouble, Savage added.

"What the implications are for tonight and the bond market and the USD (U.S. dollar) are all intertwined into the rhetoric of what voter’s think is important - and perhaps that is the divide between Wall Street and Main Street as the economy rests on both," he said.

2 hours ago

By

Christine Idzelis

Big Tech stocks rallied Tuesday as Americans cast their vote for the next U.S. president, fueling the S&P 500’s sharp gain.

The S&P 500 closed 1.2% higher, with Tesla Inc. jumping 3.5%, Nvidia Corp. climbing 2.8%, Facebook parent Meta Platforms Inc. rising 2.1% and Amazon.com Inc. advancing 1.9%.

“The market setup going into Election Day 2024” is one in which technology drives the S&P 500 much more than in 2016 and 2020, said Nicholas Colas, co-founder of DataTrek Research, in an emailed note. “We continue to be bullish on U.S. large caps and believe that the most likely path for stocks through year-end is higher regardless of which candidate wins the presidential election.”

The U.S. stock market has a much higher valuation compared to Election Day in 2016 based on where the S&P 500 is trading relative to its earnings over the next 12 months, according to Colas. But the S&P 500’s price-to-earnings ratio is now similar to Election Day in 2020.

Big Tech stocks rallied Tuesday as Americans cast their vote for the next U.S. president, fueling the S&P 500’s sharp gain.

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2 hours ago

By

Vivien Lou Chen

Market participants are expecting the Federal Reserve to cut interest rates by 25 basis points on Thursday, but that's not all: They're also contemplating how Fed Chairman Jerome Powell could react to the outcome of Tuesday's race for the White House.

In the event of a win by former President Donald Trump, the Republican nominee, "we’d expect Chair Powell to wait until the administration is in place early next year before reflecting on potential implications [of a Trump victory] for monetary policy," said Andrzej Skiba, the New York-area head of the BlueBay U.S. Fixed Income team at RBC Global Asset Management.

"We believe that an inflationary trade war would limit the Fed’s ability to cut rates in 2025," Skiba said in an email.

3 hours ago

By

Vivien Lou Chen

There are two types of trades that bond-market participants are expecting to take off once it becomes clear whether Vice President Kamala Harris or former President Donald Trump have won Tuesday's presidential election.

The first is what's known as a "bull flattener," similar to the one that unfolded during Monday's session. "Bull" refers to the sentiment behind the trade, which would be to buy U.S. government debt and send yields lower. "Flattener" refers to the resulting shape of the Treasury yield curve, which would be for long-term rates to drop by more than short-term ones. BMO Capital Markets strategists Ian Lyngen and Vail Hartman said they expect a Harris win to translate into a bull flattener.

The other trade is what's known as a "bear steepener" — in which "bear" refers to the selling of U.S. government debt, which sends yields higher, and "steepener" refers to a situation in which long-term rates rise by more than those in the shorter end. BMO's base-case view is that a Trump victory would result in a bear steepener.

3 hours ago

By

Vivien Lou Chen

Tuesday's election results are expected to arrive in waves this evening, which may trigger some volatility within financial markets, according to Michael Reinking, a senior market strategist for the New York Stock Exchange.

In a note, Reinking said that "regardless of tonight’s outcome, one of the most positive scenarios would be a definitive one. Unfortunately, that may not be the case and that is where some of the tail risk outcomes lie."

Prior to Tuesday, he said that "conventional 'wisdom' was that there would be a wave of volatility as the election approached and within equity markets this hasn’t really played out."

4 hours ago

By

Isabel Wang

U.S. stocks finished higher on Tuesday as investors awaited the results of the 2024 presidential election.

The Dow Jones Industrial Average rose 427.28 points, or over 1%, to end at 42,221.88. It was the largest one-day point and percentage gain for the blue-chip index since Oct. 9, according to Dow Jones Market Data.

The S&P 500 was up 70.07 points, or 1.2%, to finish at 5,782.76. The large-cap benchmark index posted its best day since Sept. 19.

The Nasdaq Composite surged 259.19 points, or 1.4%, ending at 18,439.17.

Both the S&P 500 and the Dow scored their sixth consecutive Election Day gains, while the Nasdaq logged its fifth straight positive Election Day.

Stocks staged a strong rally on Tuesday after the October ISM Services report showed economic activity in the U.S. services sector expanded at the fastest pace in more than two years, a sign that the economy still remained on solid footing.

Also buoying market sentiment was the upbeat earnings report from Palantir Technologies Inc., whose shares jumped 23.5% after the company posted accelerating quarterly growth in its earnings report Monday evening that was again fueled by artificial intelligence.

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