Stock markets rose on Tuesday as investors awaited U.S. results Mid-term electionsThis could affect future government spending and regulatory levels.
The Dow Jones industrial average rose 314 points, or 1%, after rallying more than 500 points earlier in the day. The S&P 500 rose 0.4%. The Nasdaq composite advanced 0.3%. All three indexes are on pace for their third positive day.
Market participants expect Republicans to take back the House of Representatives and win the Senate when results begin to roll in Tuesday night. Investors like the idea of gridlock with a divided Congress and president in Washington because it could limit government spending, new taxes and regulations.
“If we had gridlock, that would be the best thing that could happen to the market. Markets generally do well when that happens,” said Seth Cohen of the Wealth Alliance.
Overall, history shows the markets tend to get With the end of the year and 12 months after the midterm elections, investors will be relieved to have some clarity on future policy. Several races that could decide control of Congress will be a wild card if they are too close to be called, weighing on markets on Wednesday.
“Financial market reaction to a Republican victory should be muted because the House effect is already widely expected, and if Republicans control the House, the Senate effect makes less of a difference to policy outcomes,” said Goldman Sachs’ John Hatchius. he wrote in a note on Monday.
“A surprise Democratic win in the House and Senate could weigh on stocks as market participants expect additional corporate tax increases,” Hatchius added.
Stocks hit a high on Tuesday afternoon, with the Nasdaq at one point falling 0.9%. Broad sell-off in cryptocurrencies. Bitcoin plunged 15% on Tuesday after the world’s two biggest crypto exchanges, Binance and FTX, reached a merger agreement to fix the recent “cash crunch”.
“If you look at the price of bitcoin and other related crypto assets, there’s some serious selling pressure on them, and I think in the short term that’s bleeding into stock market sentiment today,” said Zachary Hill of Horizon Investments.
“Crypto is a good bellwether for investors’ risk perception more broadly,” Hill added.
SolarEdge Technologies led the broader market index, up more than 18% after posting record revenue in its most recent quarter. Elsewhere, Cole’s shares rose more than 10% After the department store chain announced the departure of its CEO next month.
Meanwhile, stocks Lift It fell 21% on disappointing quarterly results. Take-Two Interactive And Trip Advisor Earnings fell 12% and 17%, respectively, after the report.