Shares rose on Tuesday as investors await the results of the US midterm election, which could affect future government spending and the level of regulation.
The Dow Jones Industrial Average rose 455 points, or 1.4%. The S&P 500 was up 1%. The Nasdaq Composite rose 0.9%. All three indices are on their third straight positive day of momentum.
Market participants expect Republicans to back the House of Representatives and possibly even win the Senate when the results begin Tuesday night. Investors love the notion of a deadlock in Washington with a divided Congress and the president because it will limit government spending, new taxes and rules.
“If we have an impasse, it will probably be the best thing that can happen to the market. Markets usually do very well when that happens,” said Seth Cohn of The Wealth Alliance.
Overall, history shows the market gains at the end of the year and 12 months after the midterm election as investors are relieved to get some clarity on future policy. A wild card would be if the many races that could determine Congress’s control are too close to the call, an outcome that could weigh on the markets on Wednesday.
Goldman Sachs’ Jan Hetzius wrote Monday, “The financial market’s reaction to a Republican victory should be muted, as House results are already widely expected, and policy outcomes are less likely to differ from Senate results.” If Republicans control the House.” Comment.
“A surprise Democratic victory in the House and Senate will likely be on equities, as market participants may expect additional corporate tax increases,” Hatzius said.
The stock hit its highs on Tuesday afternoon, amid a broad sell-off in the cryptocurrency, with the Nasdaq down 0.9% at one point. Bitcoin fell nearly 13% on Tuesday after two of the world’s biggest crypto exchanges, Binance and FTX, came to a merger agreement to fix the latest “liquidity crisis”. Bitcoin hit a low of 17,300.80 or its lowest level since November 2020.
“If you look at the price of bitcoin and other related crypto assets, they have some serious selling pressure,” said Horizon Investments’ Zachary Hill.
“Crypto is a good bellwether for investor risk sentiment more broadly,” Hill said.
SolarEdge Technologies was the leading outperformer in the broader market index, after reporting record revenue in its most recent quarter by more than 18%. Elsewhere, shares of Kohl’s jumped more than 10% after the department store chain announced the departure of its CEO the following month.
Meanwhile, shares of lift Falling 21 per cent from disappointing quarterly results. Take-Two Interactive And tripadvisor Post-reporting earnings declined by 12% and 17%, respectively.
