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