Stocks rise for a third day as investors await midterm election results, Dow jumps 300 points
Stocks rose on Tuesday as investors awaited U.S. results midterm electionswhich could affect future levels of public spending and regulation.
The Dow Jones Industrial Average gained 323 points, or 1%, on track for its third straight day. The S&P 500 rose 0.6%. The Nasdaq Composite was 0.6% higher.
The moves come after a day when all major indices recorded a second consecutive positive session. The Dow Jones Industrial Average closed up 423.78 points, or 1.31%. Meanwhile, the S&P 500 gained 0.96% and the Nasdaq Composite rose 0.85%.
Market participants expect Republicans to retake the House of Representatives and possibly win the Senate as well when the results start rolling Tuesday night. Investors tend to like the notion of a gridlock in Washington with a divided Congress and President, as this will limit government spending, new taxes and regulations.
“The financial market’s reaction to a Republican victory should be muted, since the House outcome is already widely expected, and the Senate outcome makes less of a difference to political outcomes if Republicans control the House,” Jan Hatzius wrote. of Goldman Sachs in a Monday. Remark.
“A surprise Democrat victory in the House and Senate would likely weigh on stocks as market participants could expect further corporate tax increases,” Hatzius added.
Overall, history shows that markets tend to win until the end of the year and up to 12 months after the midterm elections, as investors are relieved to have clarity on future policy. A wild card would be if several races that could determine congressional control are too close to be called, an outcome that could weigh on markets on Wednesday.
Shares of Lyft fell nearly 20% while Interactive Take-Two and Tripadvisor fell more than 18% each after posting disappointing quarterly results.
Meanwhile, Kohl’s shares jumped more than 7% after the department store chain announced the departure of its CEO next month.