U.S. stock futures jump on Thursday as Biden inches closer to victory
- U.S. stock futures jump on Thursday as Biden inches closer to victory.
- Technology mega-caps jumped 2% in premarket trading on Thursday.
- The United States Federal Reserve is expected to lay low this week.
U.S. stock futures built further on yesterday’s rally on Thursday in anticipation of a political deadlock in Washington that might minimise major policy changes that could affect corporate America. With thousands of votes still to be counted, a prospect of a contested presidential election remains on the table.
As Democrat Joe Biden inches closer to victory, President Donald Trump called for recounts in lawsuits filed late on Wednesday. Republicans, however, are expected to retain majority in the United States Senate. This would potentially make it more challenging for Biden’s administration to impose stricter checks on businesses, including the U.S. tech giants.
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Chief Investment Officer Jonathan Bell of Stanhope Capital said 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 markets because it prevents more extreme policies.”
Technology mega-caps jumped 2% in premarket trading
Infrastructure, renewable energy, and cannabis-related stocks that are expected to rally on Biden’s victory recovered gradually on Thursday after keeping under pressure in the previous session.
Investors, however, also shifted focus to bonds as the division in Congress is likely to make it harder to gain approval for a bumper fiscal stimulus that is crucial for the U.S. economy to recover after a significant hit from the Coronavirus pandemic that has so far infected a little under 10 million people in the United States and caused more than 239 thousand deaths.
The U.S. Federal Reserve to lay low this week
The U.S. Federal Reserve is also scheduled for a policy statement later on Thursday. Owing to the uncertainty regarding the outcome of the U.S. presidential election, however, the Fed is likely to lay low this week.
The S&P 500, Nasdaq Composite, and the Dow Jones Industrial Average indices were seen hawkish on Wednesday, with Nasdaq performing the best since April, and SPX recording its best performance since June.
As of 10:16 GMT, Dow e-minis were seen 1.27% up (352 points), Nasdaq 100 e-minis 2.74% up (321.75 points), and S&P 500 e-minis 1.79% up (61.5 points) on Thursday. Major energy stocks like Chevron Corp and Exxon Mobil Corp slid 0.9% and 0.3%, respectively on Thursday.