Wall Street Close: Investors banking on GOP Senate
|- The Dow Jones Industrial Average added 542.52 points or 1.95%.
- The S&P 500 put on 67.01 points or 1.95%.
- The Nasdaq Composite added 300.15 points or 2.59%.
Investors on Thursday piled in again, banking on the Republicans retaining control of the Senate which would consequently block any major policy changes that could hurt corporate profits from under a new under Joe Biden leadership.
Biden is almost across the line of victory following his winning of Michigan and Wisconsin.
Investors have taken the view that despite the remaining battleground states are still on a knife's edge, Joe Biden has won this election and a stimulus package is on its way regardless of a divided Congress.
With a GOP Senate, there are less concerns about tighter regulations on Big Tech and a corporate tax hike.
However, due to a divided Congress, any stimulus package that is agreed upon is likely to be much smaller than anticipated, so the Federal Reserve will be crucial for markets in the New Year.
''Equity markets are incredibly strong despite uncertainty on the US presidential race and control of the Senate. A runoff election for the Senate may be required in Georgia, which would mean a clear result wouldn’t be known until January,'' analysts at ANZ Bank explained.
''For now, the market is assuming a mixed Congress and a tighter fiscal stance. Hence, more generous Fed liquidity would be required to achieve its average inflation target.''
On Thursday, the Fed's interest rate decision and event was lacking anything new for markets to chew on, but Chair Powell said that the Fed would not consider directly funding fiscal activities but again pledged to do whatever it can sustain the economy.
As for the three main benchmark's performances, the Dow Jones Industrial Average rose 542.52 points, or 1.95%, to 28,390.18. The S&P 500 added 67.01 points, or 1.95%, to 3,510.45 and the Nasdaq Composite added 300.15 points, or 2.59%, to 11,890.93.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.