While the name of the next U.S. president remains unresolved, on Wednesday, the New York Stock Exchange soared, driven by health as well as technology stocks. Donald Trump and Joe Biden appear to be divided by the vote count the day after the election, but the face of the new Congress is clearer, and it has encouraged markets. Therefore, the House of Representatives should remain the Democratic majority and, according to the provisional results, the Senate with a Republican majority rule out the possibility of a ‘blue wave’ (a Democratic-dominated Congress and White House).
At the close, the Dow Jones index climbed 1.34 percent to 27,847 points followed by a total rise of 3.7 percent on Monday and Tuesday, while the large S&P 500 index jumped 2.21 percent to 3,443 points which collectively gained 3 percent on Monday and Tuesday. The Nasdaq Composite, comprised of technology and biotech stocks, climbed 3.85 percent to 11,590 points after increasing 2.3 percent on Monday and Tuesday. Earlier, the EuroStoxx 50 rose 2 percent in Europe and the CAC 40 ended up 2.44 percent, backed by coronavirus vaccine hopes.
On Wednesday, seven of the 11 industry indexes in the S&P 500 ended higher, beginning with health (up 4.4 percent), technology (up 3.8 percent), and telecom services (up 4.2 percent). The sectors which underperformed were raw materials (-1.5 percent), industries (up 0.6 percent) and financials (-0.8 percent). The consumer cyclicals have suffered from the absence of a “blue wave” advocated by the Democrats that decreases the chances of implementing a new financial stimulus program.
Wall Street recovered much of last week’s losses in three days, when the DJIA dropped by 6.5 percent, the S&P 500 by 5.6 percent and the Nasdaq by 5.5 percent. But government bonds have remained sought by security-conscious investors in an unpredictable climate, worried about a prolonged period of political and even social uncertainty when presidential results are contested if Donald Trump is given loser.