US stocks rebounded from a week of deep losses on Monday as investors prepared for Tuesday’s contentious presidential election.
The Dow Jones industrial average climbed as much as 391.60 points, or about 1.4 percent, to 26,893.20 following the opening bell after fears about surging coronavirus infections around the world drove the blue-chip index to its worst week since March.
The benchmark S&P 500 and the tech-heavy Nasdaq each jumped as much as 1.2 percent in early trading before all three major indexes slightly pared the gains to about 1.1 percent as of 9:49 a.m.
The bounce came as investors braced for all the uncertainty that Election Day could bring. Joe Biden is ahead of President Trump nationally but the race is tighter in key battleground states, raising the possibility that a winner won’t be determined for days or weeks as election officials count large numbers of mail-in ballots cast amid the COVID-19 pandemic.
“With one day to go until the presidential election, the stock market will undoubtedly take a wait and see attitude, with traders apprehensive about disputed election results,” said Marc Chaikin, founder of investment research firm Chaikin Analytics. “The key for the stock market in the short-term is a concern over an uncertain and timely election result and the possibility of a disputed outcome.”
Investors will be watching who takes control of the Senate as well as the White House, which could determine the fate of a new stimulus package to blunt the economic damage from the pandemic.
Polls favor Democrats to take the upper chamber of Congress, which could make it easier to pass another big stimulus bill given Republicans’ resistance to a large spending package — and boost stock prices as a result.
“The runway is much cleaner for asset prices to take off and react more asymmetrically to the Democratic sweep scenario,” said Stephen Innes, chief global market strategist at Axi.
Wall Street followed European markets higher after China reported that its manufacturing activity expanded for the eighth straight month in October, counterbalancing market jitters brought on by Germany, France and the UK brought back lockdowns to control the spread of the deadly coronavirus.
London’s FTSE 100 was up about 1.2 percent as of 9:36 a.m., while Germany’s DAX was recently up roughly 1.9 percent at Paris’s CAC 40 climbed about 2 percent.
Oil prices, however, took a hit as the new lockdowns fueled concerns about demand for energy falling further. Prices for West Texas Intermediate crude oil dropped about 0.4 percent to $35.64 a barrel as of 9:41 a.m., while Brent crude was also down about 0.4 percent at $37.78 a barrel.
With Post wires
