The S&P 500 and Nasdaq indices in today’s volatile market are currently in green numbers.
We are in a volatile market as investors wait for the exhausting and potentially questionableUS election result after President Donald Trump took the lead in some key states.
Both Trump and Biden say they are on the road to victory after the results of most states were counted. Trump did not hesitate, falsely claiming that the election had been “stolen” from him. But millions of votes had not yet been counted.
The knife-edge election and the prospect of a tough legal battle to determine the winner sent S&P e-mini futures down 1.15%. Within a few hours, however, they recovered and traded up to 1.5% in green numbers.
“The indecision of futures contracts is not surprising because we do not yet have a clear result,” said Nicolas Janvier, head of US stocks at Columbia Threadneedle in London.
Trump won the battlefields of Florida, Ohio and Texas and took Biden’s hopes for a decisive early victory, but Biden said he was confident and well on his way to winning the White House by winning in three key Rust Belt states (Central New York, Pennsylvania, Ohio, Indiana, Illinois, Michigan Peninsula and Northeast Wisconsin).
Nevertheless, the prospect of political uncertainty caused the purchase of US government bonds, which caused the largest one-day decline in yields on 10-year and 30-year bonds since June. Shares of US banks, which usually track government bond yields, fell between 1.1% and 2.5%.
Shares of technology giants, including Apple Inc., Amazon.com Inc. and Nvidia Corp., rose more than 2 %, with some investors pointing to a lower antitrust laws and Big Tech threat over Trump’s than Biden’s presidency.
Which stocks could do well with Biden and which with Trump?
In the 2016 election, American futures plunged when Trump won against Democrat Hillary Clinton. The next day, however, he launched the so-called “Trump rally”, when the S&P 500 jumped by 5% in a month, which was supported by promises of massive tax cuts and financial deregulation.
The S&P 500 index has climbed approximately 57% since the Trump election in 2016, while the information technology index rose 149% and energy fell 56%, according to Datastream.