November 30, 2022

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Dow Jones rises more than 300 points as investors anticipate midterm results

Dow Jones rises more than 300 points as investors anticipate midterm results

Stocks rose on Tuesday as investors await US results midterm electionswhich could affect future levels of government spending and regulation.

The Dow Jones Industrial Average rose 363 points, or 1.1%. The S&P 500 rose 0.8%. The Nasdaq Composite Index rose 0.8%. All three indicators were on track for the third day in a row.

Market participants expect Republicans to retake the House and possibly win the Senate as well when results start to come in on Tuesday night. Investors tend to like the concept of gridlock in Washington with a divided Congress and president because it will limit government spending and new taxes and regulations.

“If we have a stalemate, this is probably the best thing that can happen to the market,” said Seth Cohan of The Wealth Alliance. “And usually the markets do very well when that happens.”

In general, history shows the markets tend to earn At the end of the year and even 12 months after the midterm elections as investors are comfortable getting some clarity on future policy. The wild card may be one if the multiple races that could determine control of Congress are too close to speculate, an outcome that could affect markets on Wednesday.

“The financial market reaction to the Republican victory should be muted, as the House outcome is already widely expected, and the Senate outcome makes less of a difference to policy outcomes if Republicans control the House,” Jan Hatzius of Goldman Sachs. Written in a note on Monday.

“The Democrats’ surprise win in the House and Senate is likely to weigh on stocks, as market participants may expect additional increases in corporate tax,” Hatzius added.

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The rally was broad based with all 11 sectors of the S&P 500 trading in positive territory. Materials and IT were the leading sectors, up 2.6% and 2%, respectively. Falling Treasury yields boosted gains in technology stocks.

SolarEdge Technologies was the leader in performance in the broader market index, up more than 18% after posting record revenue last quarter. Kohl’s Shares Jumped More Than 7% After the supermarket chain announced the departure of its CEO next month.

Meanwhile, shares Lift It fell 21% in disappointing quarterly results. Take-Two Interactive. interactive And the Tripadvisor They fell 12% and 17%, respectively, after the earnings announcement.