US equity futures are jumping on Thursday as Biden gets closer and closer to victory.
Technology mega-caps gained 2% in Thursday’s pre-market trading.
The Federal Reserve is expected to hit its low this week.
U.S. equity futures continued to build on yesterday’s rally on Thursday in anticipation of a political stalemate in Washington that could minimize major political changes that could impact entrepreneurial America. With thousands of votes yet to be counted, the prospect of a contested presidential election remains on the table.
As Democrat Joe Biden moves ever closer to victory, President Donald Trump has called for a recount of the lawsuits filed late Wednesday. It is expected, however, that the Republicans will retain the majority in the United States Senate. This would potentially make it more difficult for Biden’s administration to enforce tighter controls on companies, including U.S. tech giants.
This was said by Chief Investment Officer Jonathan Bell of Stanhope Capital on Thursday:
“The outcome of the election in terms of the potential for a Democratic president and a Republican senate is in many ways the best news for the markets because it prevents more extreme policies.
Technology mega-caps gained 2% in pre-market trading
Thursday’s technology mega-caps, including Amazon (NASDAQ: AMZN), Alphabet and Apple (NASDAQ: AAPL), each rose 2% on the stock market before the bell, after gaining over 4% on Wednesday.
Infrastructure, renewable energy and cannabis stocks, which are expected to recover after Biden’s victory, gradually recovered on Thursday after remaining under pressure in the previous session.
However, investors also shifted their focus to bonds as the split in Congress is likely to make it more difficult to get approval for a strong fiscal stimulus that is critical to the recovery of the U.S. economy after the coronavirus pandemic that has so far infected just under 10 million people in the United States and killed more than 239,000 people.
The US Federal Reserve will remain low this week
The US Federal Reserve is also scheduled for a policy statement later on Thursday. However, due to the uncertainty about the outcome of the US presidential election, the Fed will probably reach a low point this week.
The S&P 500, Nasdaq Composite and Dow Jones Industrial Average indices were seen as hawk-hunters on Wednesday, with the Nasdaq performing best since April and the SPX performing best since June.
At 10:16 GMT, the Dow e-minis rose 1.27% (352 points), the Nasdaq 100 e-minis 2.74% (321.75 points) and the S&P 500 e-minis 1.79% (61.5 points) on Thursday. Major energy stocks such as Chevron Corp and Exxon Mobil Corp declined by 0.9% and 0.3% respectively on Thursday.