The major US stock indexes open higher on hopes that a contested US presidential election will be avoided and a clear winner will be decided.
Wall Street’s main stock indexes opened higher on Tuesday – Election Day in the United States – as investors cling to optimism that a clear winner will emerge from an exceptionally divisive US presidential election.
Within minutes of the open of trading on Wall Street, the Dow Jones Industrial Average was up more than 341 points or 1.27 percent at 27,266.96.
The S&P 500 – a gauge for the health of US retirement and college savings accounts – was up just shy of 1 percent, while the tech-heavy Nasdaq Composite Index was up almost half a percentage point.
After slumping to five-week lows last week, all three major stock indexes kicked November off on a high note on Monday.
The CBOE volatility index, known as Wall Street’s fear gauge, retreated for a second day after touching a 20-week high last week on surging coronavirus cases globally and mounting anxiety that no clear winner would emerge in the race for the Oval Office.
Storefronts from New York to Los Angeles have been boarded up in case violence erupts once the polls are closed.
But Wall Street was looking at a glass half full election outcome scenario.
Economists at Goldman Sachs led by Jan Hatzius wrote in a note to clients on Tuesday that “there is a good chance the presidential election outcome will be clear on election night” because Democratic presidential nominee Joe Biden leads polls narrowly in Arizona, Florida, Georgia, and North Carolina – all of which are likely to report results quickly.
“Winning any of these would make it difficult for President Trump to reach 270 electoral votes,” said Goldman.
Still, there may not be a clear victor on Tuesday night or even Wednesday morning if there is a protracted ballot count or the results are challenged.
Biden is ahead in national opinion polls but the race in key battleground states is still tight enough for President Donald Trump to ride to victory.
Almost 100 million Americans cast their ballots early.
Trump is relying on a big turn out from his supporters on Tuesday.
“I think we will have victory,” Trump told Fox News on Tuesday. “I look at it as being a very solid chance at winning here.”
In what is sure to be a big week for Wall Street, all eyes will be on Tuesday night’s election and then the Federal Reserve’s two-day policy meeting and a monthly jobs report later this week.
Among stocks making headlines on Tuesday:
Shares of PayPal Holdings were down 6.5 percent after it lowered its forecast for Q4 profits.
And shares of Royal Caribbean Cruises Ltd were up 1.28 percent after the company said after the bell on Monday that it is suspending cruises through the end of the year.