The S&P 500 posted solid gains on Tuesday as stocks broadly advanced, with traders holding off for the results of a high-stakes US presidential election.
The benchmark index rose 1.23 per cent, closing at 5,782.76. The Nasdaq Composite gained 1.43 per cent, finishing at 18,439.17, while the Dow Jones Industrial Average added 427.28 points, or 1.02 per cent, closing at 42,221.88.
With the S&P 500 up more than 21 per cent so far this year, it's on pace for an unusually strong pre-election rally, now within reach of its all-time high.
The tight race between former President Donald Trump and Vice President Kamala Harris is keeping investors on edge. Attention is also focused on control of Congress, as a clean sweep by either party could trigger significant shifts in spending policies or tax reforms.
The election results could heavily influence the market's year-end performance, though investors should prepare for potential volatility in the short term. According to CNBC data dating back to 1980, major indices typically post gains between Election Day and year-end, but often dip in the days and weeks following the election. The uncertainty surrounding the outcome could add further turbulence to the market.
On Tuesday, there were no clear election-driven trends emerging in stocks, but the market saw a broad-based rally.
Financial stocks, which could benefit from deregulation if the GOP takes control, showed modest gains. The SPDR S&P Bank ETF (KBE) rose by 1.6 per cent. Nvidia shares climbed nearly 3 per cent, although the chipmaker, a staple of the bull market, is likely to remain resilient regardless of the election's outcome. Tesla also advanced by 3.5 per cent, with the stock potentially benefiting from either a Republican or Democratic victory, given CEO Elon Musk’s ties to both parties.
Beyond the election, investors are also looking ahead to the Federal Reserve's upcoming rate decision on Thursday, with fresh insights expected from Chair Jerome Powell on the central bank’s future policy stance. Market participants are pricing in a 98 per cent chance of a quarter-point rate cut after September’s half-point reduction, according to CME Group’s FedWatch Tool.
Futures
The SPI futures are pointing to a 0.8 per cent gain.
Currency
One Australian dollar at 8.35am was buying 66.36 US cents.
Commodities
Gold has added 0.24 per cent. Silver has gained 0.49 per cent. Copper has jumped 0.69 per cent. Oil has gained 0.98 per cent.
Figures around the globe
European markets closed mixed. London’s FTSE lost 0.14 per cent, Frankfurt added 0.57 per cent, and Paris closed 0.48 per cent higher.
Turning to Asian markets, Tokyo’s Nikkei added 1.11 per cent , while Hong Kong’s Hang Seng gained 2.14 per cent and China’s Shanghai Composite jumped 2.32 per cent.
Yesterday, the Australian share market closed 0.40 per cent lower at 8132.
Ex-Dividends
ResMed Inc (ASX:RMD) is paying 5.5806 cents unfranked
Dividends payable
Elanor Commercial Property Fund (ASX:ECF)
United Overseas Australia Ltd (ASX:UOS)
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, CNBC, Bourse Data, Trading Economics, CoinMarketCap, Marketech.
