S&P, Nasdaq futures rise in volatile trade as election race tightens
New York (Nov 4) Futures tracking the S&P 500 and the Nasdaq indexes rose in volatile trading on Wednesday as investors faced the prospect of a drawn-out and potentially contested U.S. election result after President Donald Trump took the lead in some key states.
Both Trump and Biden claimed they were on course for victory after results for a majority of states were called. Trump went further, claiming falsely that the election was being “stolen” from him with millions of votes still uncounted.
The knife-edge election and the prospect of an acrimonious legal battle to determine the winner sent S&P e-mini futures tumbling 1.15% earlier, but they recovered to trade up 0.5% by 5:54 a.m. ET (1054 GMT).
“The indecisiveness in futures is not surprising because we don’t yet have a clear result,” said Nicolas Janvier, head of U.S. equities at Columbia Threadneedle in London.
Trump won the battlegrounds of Florida, Ohio and Texas, dashing Biden’s hopes for a decisive early victory, but Biden said he was confident and was on track to winning the White House by taking three key Rust Belt states.
Investors have said they favor a definitive, fast resolution to the election as that would clear the way for a deal on a stimulus package to help the damaged U.S. economy. Analysts have also said the market will be comfortable with a clear Trump victory.
Shares of technology mega-caps including Apple Inc, Amazon.com Inc and Nvidia Corp surged more than 2% in premarket trading with some investors pointing to a lower threat of antitrust scrutiny for Big Tech under Trump than under a Biden presidency.
Some infrastructure, renewable energy and marijuana stocks, seen as likely winners from a Biden presidency, sank as much as 7%.
“Generally, the Biden blue-wave train is favorable to mid-caps, cyclicals and stocks exposed to trade with emerging markets so people are having to move quickly back into the secular growth names and some of the traditional energy stocks,” said Kiran Ganesh, multi-asset strategist at UBS Global Wealth Management’s chief investment office in London.
Still, the prospect of political uncertainty also sent investors to U.S. Treasuries, sparking the biggest one-day drop in 10- and 30-year bond yields since June. Shares of U.S. banks, which typically track Treasury yields, slipped between 1.1% and 2.5%.
Reuters
