U.S. markets soared Wednesday, lifted by tech shares, as investors waited for final results in the highly charged presidential race.
Earlier in the day, President Trump falsely asserted election fraud, pledged to mount a legal challenge to official state results and made a premature claim of victory. His Democratic rival, Joe Biden, maintained he was still “on track to win this election” and called for patience, citing several key states where votes were still being counted. As of 4 p.m. Wednesday, Biden led Trump by 23 electoral votes, 237 to 214, according to The Washington Post’s tracker.
“We have seen a market rally for the past two sessions ahead of the election with the hope of ending electoral uncertainty,” Anthony Denier, chief executive of the app-based brokerage Webull, said in comments emailed to The Post. “A contested election is the biggest risk facing the markets amid this election cycle.”
After whipsawing overnight and surging nearly 800 points at midday, the Dow Jones industrial average ended the session at 27,847.66, up 367.63 points, or 1.3 percent. The S&P 500 added 74.28 points, or 2.2 percent, to settle at 3,443.44. The tech-heavy Nasdaq composite index swelled 430.21 points, or nearly 3.9 percent, to end at 11,590.78.
Michael Farr, president of Farr, Miller & Washington, said the post-election rally mirrors what happened in 2016, when investors reckoned with an unexpected result and rallied by morning.
“Pundits were telling us to expect a blue wave, but we didn’t get it. It doesn’t look like the Senate is going to have a significant majority one way or the other, and we don’t know who the president is going to be,” Farr said. “But with all that in mind, Wall Street was able to recalculate.”
A record-breaking 101 million Americans cast ballots before Election Day as many voters sought to avoid crowded polling places because of the coronavirus pandemic. Voter turnout is on pace to be the highest in more than a century, according to Edison Research, with more than 157 million ballots cast, representing a 65.7 percent turnout rate among eligible voters. The flood of early and mail-in voting has reshaped how and when most ballots are counted, creating uncertainty around when results will be known.
“Chaos is the last thing people want, particularly when coronavirus is causing so much disruption to the world,” Russ Mould, investment director at AJ Bell, said in emailed comments to The Post. “We’re now facing the prospect of volatile markets for days or potentially weeks until the election is sorted out.”
The yield on the 10-year U.S. Treasury Note, which had edged near its highest level since June, tumbled 13 percent as investors flocked to safe havens. Bond yields move inversely to prices.
Jesse Cohen, a senior analyst at Investing.com, said that risk appetites are waning in response to the possibility of a prolonged legal battle to settle the election outcome.
“If this were to go to the Supreme Court, then the results would take even longer,” Cohen said Wednesday in comments emailed to The Post. “That’s probably the worst-case scenario out of all the possible ones at the moment.”
Election uncertainty is merely compounding the overwhelming unknowns as the economic recovery trudges onward and the pandemic threatens to cause another wave of business and travel restrictions. The coronavirus has killed at least 233,000 Americans and sickened at least 9.45 million.
On Wednesday, ADP’s private payroll report revealed that American firms added 365,000 jobs last month. Well below analyst forecasts, the figure reflects the uphill battle facing the recovery. Investors are looking toward weekly jobless claims data Thursday for a more recent snapshot.
“When the election is finally decided, we have a heck of a lot of challenges to tackle on the way to full recovery,” Mike Loewengart, managing director of investment strategy at E-Trade, said in an email to The Post.
In oil markets, which are more focused on the pandemic and market fundamentals than the election, prices climbed higher after OPEC and its allies considered further production cuts. Previous cuts this year have put OPEC on track for its lowest revenue in 18 years.
Brent crude, the international oil benchmark, settled 3.4 percent higher, at $41.23 per barrel. West Texas Intermediate crude, the U.S. oil benchmark, climbed 4 percent, to $39.15.