Technology and health care companies led the stock market rally on Wednesday, as Wall Street embraced a reversal of more gridlock in Washington, even limiting the results of the US presidential election.
The S&P 500 rose 2.2% for its best day in five months. The benchmark index was up 3.5% before the market reduced its momentum by the end of the day. That pullback erased more than 450 points from the Dow Jones Industrial Average, although the blue-chip index still closed over 360 points.
The Nasdaq had its biggest gain in more than six months, as traders doubled down on technology stocks. Health insurers were also big winners, as prospects for the industry overhaul diminished.
The fate of the US presidency is slim as President Donald Trump or Democratic challenger Joe Biden secured the 270 electoral college votes needed to win by Wednesday afternoon. But after an overnight session in global markets where Trump announced a premature victory, Wall Street acted as if White House living could be secondary.
Analysts said the gains came in the form of markets centered on the benefit of political control of the country, with the remainder sharing between Democrats and Republicans. As Republicans get closer to retaining control of the Senate, the prospect of an increase in taxes increases, and there are stricter rules on businesses that investors expect if Democrats score an electoral sweep, though a larger stimulus effort for the economy That is what Wall Street says it looks like now. Also unlikely.
Melda Mergen, deputy global head of equities at Columbia Threadneedle, said, “The first information people can digest is that a split government is fine, and we can deal with it.” “No major changes are expected on the policy side soon.”
She cautioned, however, that the initial moves for the market may not follow. “It’s a very quick response without knowing the end results,” she said. It is emotional rather than rational. ”
The S&P 500 gained 74.42 points to open at 3,443.44 points. The Dow added 367.63 points, or 1.3%, to 27,847.66. The Nasdaq rose 430.21 points or 3.9% to 11,590.78 points.