The stocks opened significantly higher before encountering some volatility and reducing some gains.
A Biden win would likely also mean less news and higher risk for stocks in the upcoming term, investors believe.
“If the polls are about right, Joe Biden will comfortably win the election, and we’ll know before midnight tomorrow,” said Andy Laperriere and Don Schneider of Cornerstone Macro.
“We have emphasized that the result of the Senate is important for the course of fiscal policy,” said Citi economist Andrew Hollenhorst in a message to customers, although no party will likely receive a filibuster-safe majority, so that cross-party cooperation will continue to be required could be for the next stimulus calculation.
“In every election scenario, we expect a tax package of $ 1.5 trillion plus, possibly after the election,” said Hollenhorst.
Congress has been bogged down in negotiating a second stimulus agreement since the summer. Investors have been waiting for results and got nervous at the headlines about progress. This really shows us that as the markets feel that the US economy needs more help to get back on track, as the effects of the CARES bill wear off.
Millions of Americans still need government benefits to make ends meet, and that’s bad news because the US economy is heavily dependent on consumer spending.
And as if that choice and its implications weren’t enough to make investors think about it, the week is also full of key economic reports, including October’s job report.