Nasdaq and S&P 500 futures climb as Trump secures lead in three key states

Written by: Wajeeh Khan
November 4, 2020
  • Nasdaq and S&P 500 futures climb as Trump secures lead in three key states.
  • U.S. tech giants, including Amazon and Apple, were up 2% in premarket trading.
  • U.S. major banks printed a 1.1% to 2.5% decline early on Wednesday.

S&P 500 and Nasdaq futures rallied on Wednesday in anticipation of tight competition for the U.S. Presidency. Trading turned volatile as President Donald Trump was reported in the lead in a few key states.

So far, both contestants, Biden and Trump, have made statements claiming that they were on track to victory after several states revealed results.

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S&P e-mini futures were reported about 1.15% down earlier on Wednesday but recovered later (10:54 GMT) to trade 0.5% up. U.S. dollar index also retreated on Tuesday as traders predicted a Biden victory.

U.S. tech giants were up 2% in premarket trading

Trump took the lead in Texas, Ohio, and Florida that practically wiped a prospect for Biden’s decisive early victory. Winning 3 key Rust Belt states, however, Biden expressed confidence that he was on course to be elected as the new President of the United States.

Investors are keenly waiting for a definitive outcome of the presidential election as it will ramp up the decision on a stimulus package to support the U.S. economy that has taken a massive hit in recent months due to the Coronavirus pandemic.

U.S. tech giants, including Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), and Nvidia (NASDAQ: NVDA), were reported over 2% up in premarket trading on Wednesday. Investors forecast a greater threat of antitrust probes for the technology mega-caps under Biden, as compared to under Donald Trump.

Some marijuana, renewable energy, and infrastructure stocks were seen trading close to 7% down in early trading on Wednesday. These stocks are expected to celebrate on Biden’s victory. According to multi-asset strategist, Kiran Ganesh:

“Generally, the Biden blue-wave train is favourable to mid-caps, cyclicals and stocks exposed to trade with emerging markets, so people are having to move quickly back into the secular growth names and some of the traditional energy stocks.”

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U.S. major banks printed a 1.1% to 2.5% decline

The political uncertainty also fuelled the biggest intraday decline since June in both 10-year and 30-year bond yields. Consequently, the major U.S. banks printed a 1.1% to 2.5% decline in the stock market early on Wednesday.

As of 10:54 GMT, Dow e-minis were about 0.11% down (31 points), and Nasdaq 100 e-minis were 2.42% up (272.25 points).

In the U.S. Senate, Republicans secured five most competitive races out of a total of fourteen, hinting at a greater probability that they will retain their majority in the upper chamber.

Since Trump victory against democrat Hilary Clinton in 2016, the S&P 500 has gained close to 57%. The information technology index has climbed a massive 149% during this period, while the energy index is down about 56%.