S&P, Nasdaq futures rise in unstable buying and selling as election campaigns intensify
© Reuters. The New York Stock Exchange is pictured
By Sagarika Jaisinghani and Susan Mathew
(Reuters) – Futures, which track the S&P 500 and the Nasdaq index, rose in volatile trading Wednesday as investors faced the prospect of a lengthy and potentially controversial US election result after President Donald Trump agreed in some Key states had taken the lead.
Both Trump and Biden claimed they were on their way to victory after the results were cited for the majority of states. Trump went further, falsely claiming that the election was “stolen” from him with millions of votes not yet counted.
The razor-sharp elections and the prospect of a bitter legal battle over the winner dropped S&P E mini futures 1.15% earlier but rebounded, trading 0.5% by 5:54 a.m. CET (1054 GMT) .
“The indecision on futures is not surprising as we don’t have a clear result yet,” said Nicolas Janvier, head of US equities at Columbia Threadneedle in London.
Trump won the Florida, Ohio and Texas battlefields and shattered Biden’s hopes of a crucial early win, but Biden said he was confident and well on his way to winning the White House by capturing three key Rust Belt states.
Investors have said they are in favor of a final, quick fix to the election as it would pave the way for an agreement on a stimulus package to support the battered US economy. Analysts have also said the market will be satisfied with a clear Trump victory.
Shares in technology mega-caps, including Apple Inc (NASDAQ :), Amazon.com Inc (NASDAQ :), and Nvidia (NASDAQ 🙂 Corp, rose more than 2% in premarket trading, with some investors dropping to a lower one Risk of antitrust scrutiny for Big pointed out Tech under Trump as under a Biden presidency.
Some infrastructure, renewable energy, and marijuana stocks that were seen as likely winners of a Biden presidency fell as much as 7%.
“In general, the biden blue wave train is cheap for mid-caps, cyclicals and stocks exposed to emerging market trading so people need to quickly get back to the names of secular growth and some of the traditional energy stocks,” said Kiran Ganesh, multi-asset strategist at UBS Global Wealth Management’s Chief Investment Office in London.
However, the prospect of political uncertainty also drove investors to US Treasuries, triggering the largest one-day decline in 10- and 30-year bond yields since June. US bank stocks, which typically track government bond yields, were down between 1.1% and 2.5%.
Graphic: “Biden” shares versus “Trump” shares – https://fingfx.thomsonreuters.com/gfx/mkt/qzjpqabydpx/Pasted%20image%201604472007624.png
At 5:54 p.m. ET, they fell 31 points, or 0.11%, and 272.25 points, or 2.42%.
Meanwhile, Republicans withheld Democratic challengers in five of the 14 most competitive races in the U.S. Senate, increasing their chances of retaining a majority in the 100-seat chamber, although the final outcome may not be clear for some time.
US futures crashed on election night in 2016 as Trump celebrated an angry victory over Democrat Hillary Clinton. The next day, however, the so-called “Trump rally” began, with the S&P 500 rising 5% in one month, driven by pledges of massive tax cuts and financial deregulation.
The S&P 500 is up about 57% since Trump’s election in 2016, with the information technology index up 149% and energy consumption up 56%, according to Datastream.
Graphic: S&P 500 in the first few terms: Trump vs Obama – https://fingfx.thomsonreuters.com/gfx/mkt/ygdvznodzvw/Pasted%20image%201604467379861.png