The S&P 500 gained 0.8%, and the Nasdaq Composite advanced over 1%. The Dow Jones Industrial Average climbed 248 points, or about 0.6%.
The latest poll from NBC News suggests the race is “neck and neck” between former President Donald Trump and Vice President Kamala Harris. Close attention also remains on which party dominates Congress, given that a sweep by Republicans or Democrats could contribute to drastic spending changes or a big revamp of tax policy. (Follow CNBC’s 2024 election live blog here.)
The results could have a significant effect on where stocks end the year, but investors may want to brace for some near-term choppiness. CNBC data going back to 1980 suggests the major averages gain between Election Day and the end of the year, but typically fall in the session and week after. Uncertainty over the results could lead to even more shakiness in the market.
“We’re positive on the market regardless of what happens tonight, today. We think Congress will be a divided Congress. That’s going to be the most positive thing of all,” said Alicia Levine, head of investment strategy and equities, on “Squawk Box.”
Beyond the election, investors await the Federal Reserve’s November rate decision due Thursday and fresh commentary from Chair Jerome Powell on the central bank’s policy moves going forward. Traders are pricing in 98% odds of a quarter-point cut following September’s half-point reduction, according to CME Group’s FedWatch Tool.
On the earnings front, Palantir popped 12% in the premarket on strong quarterly results and upbeat revenue guidance, while NXP Semiconductors fell 5% on a soft outlook due to macro concerns.
Stocks finished lower in Monday’s session. The Dow slumped more than 250 points, or 0.6%. The S&P 500 and Nasdaq Composite fell about 0.3% each.
The S&P 500 is already up more than 19% year to date, an unusually strong run up ahead of an election, and is within 3% of its record high.