The markets surged on Tuesday as investors eagerly awaited the outcome of a high-stakes presidential election that could reshape policy direction and economic outlook. The Dow jumped over 400 points, with the S&P 500 climbing in a broad rally across sectors. In a day marked by heightened anticipation, traders closely monitored the tight race between former President Donald Trump and Vice President Kamala Harris, along with Congressional results that could signal shifts in fiscal and regulatory policies. While positive sentiment held through the day, the imminent election results and an upcoming Federal Reserve decision are set to test the momentum of this rally as the week unfolds.

Key Takeaways:

  • Dow Gains Over 400 Points: The Dow Jones Industrial Average rallied by 427.28 points, or 1.02%, ending the day at 42,221.88 as investors displayed optimism amid election anticipation. This significant climb highlights the market’s resilience despite the high-stakes presidential race and Congressional elections that could reshape fiscal policy. The Dow’s broad-based gains included contributions from major banks and blue-chip stocks, positioning the index for further volatility as election results come in.
  • S&P 500 Rises 1.23% in Broad Rally: The S&P 500 advanced 1.23% to close at 5,782.76, reflecting positive sentiment across diverse sectors. With the S&P up over 21% year-to-date, today’s rally brings it within range of a record high. The rally reflects optimism on Wall Street, even as the Federal Reserve’s upcoming rate decision later in the week looms, with expectations of a quarter-point cut likely fuelling part of today’s gains.
  • Nasdaq Composite Strengthens on Tech Gains: The Nasdaq Composite rose 1.43% to close at 18,439.17, underpinned by notable performances from technology leaders. Nvidia gained nearly 3% and surpassed Apple as world’s most valuable company, while Tesla surged by 3.5%, supported by its appeal across both political parties. Other chip stocks, including Intel and Broadcom, also climbed over 3%, underscoring the sector’s role as a safe haven amidst potential policy changes that may impact tech regulation and innovation.
  • European Markets Hold Steady: European markets ended slightly higher as traders monitored the US election closely. The pan-European Stoxx 600 closed up 0.06%, with industrial stocks leading gains at 1.2%, while auto stocks slipped by 1.82%. The DAX gained 0.55% in Germany, supported by solid performance in manufacturing, while France’s CAC 40 rose by 0.5% to 7,407, boosted by gains in key sectors. Meanwhile, the FTSE 100 dipped 0.14% to 8,172.39, as rising bond yields and election uncertainty weighed on sentiment.
  • Asia-Pacific Markets See Mixed Gains: Asia-Pacific stocks showed mixed results in anticipation of the US election. South Korea’s Kospi rose by 1.83% to 2,588.97, reversing a three-day losing streak, while the small-cap Kosdaq index soared 3.43% to 754.08, driven by optimism around the election and upcoming policy meetings. In Australia, the S&P/ASX 200 increased 0.56% to 8,164.6, bolstered by expectations of steady interest rates. Meanwhile, China’s CSI 300 rose 1.41% to 3,944.76 as investors anticipated potential fiscal stimulus announcements at China’s parliament meeting, which could boost economic recovery.
  • Oil Prices Stabilise Ahead of Election Results: Oil prices climbed as traders braced for election results and potential supply disruptions. Brent crude increased by 0.6%, closing at $75.53 per barrel, while West Texas Intermediate gained 0.73% to settle at $71.99 per barrel. Oil market sentiment was also influenced by an anticipated hurricane in the Gulf of Mexico that could curb US oil output by up to 4 million barrels. Additionally, OPEC decided to delay its production hike, supporting prices amid concerns over global supply-demand imbalances and weak economic data.
  • US Treasury Yields Slip in Election Run-Up: Treasury yields were mixed as investors prepared for the presidential election results. The 10-year yield edged down by 2 basis points to 4.289%, while the 2-year yield rose by 2 basis points to 4.197%, reflecting caution and uncertainty among bond traders. The recent upward trend in yields follows stronger-than-expected economic data, with the services PMI hitting 56.0, its highest level since July 2022. With the Federal Reserve’s policy announcement and possible rate cut on the horizon, yields may continue to fluctuate as investors reassess economic growth projections.

FX Today:

  • EUR/USD Maintains Bullish Tone as Traders Eye US Election: EUR/USD traded around 1.0928 on Tuesday, showing resilience as traders focused on the US election results. The pair remained near the 50-period SMA at 1.0848, with a neutral-to-bullish outlook supported by demand around key levels. Immediate resistance lies at the 100-period SMA at 1.0955, with a breakout above this level potentially pushing the pair towards the 1.1000 psychological barrier. However, failure to surpass this resistance could result in consolidation, with the 50-period SMA providing key support.
  • USD/CHF Faces Resistance Amid Bearish Sentiment: USD/CHF continued to struggle on Tuesday, trading near 0.8630. The pair encountered strong resistance at the 50-period SMA at 0.8657, keeping the bearish tone intact. Support around the 200-period SMA at 0.8580 remains a critical level, with a break below signalling further downside potential towards 0.8500. Conversely, if USD/CHF can clear resistance at 0.8657, it could shift market sentiment, allowing for a possible rebound toward 0.8700. The outlook remains bearish as long as the pair remains below the 50-period SMA.
  • AUD/USD Tests Key Resistance as Recovery Attempts Continue: AUD/USD traded near 0.6635, reflecting an attempt to recover from recent lows. The 50-period SMA at 0.6589 and the 100-period SMA at 0.6637 pose significant resistance, with a break above these levels potentially signalling a positive shift towards the 0.6700 mark. Failure to sustain gains above 0.6600, however, could lead to renewed selling pressure and a test of the 0.6550 support level. The broader trend remains cautious as the pair struggles against these technical barriers.
  • Gold Consolidates Above Critical Support Amid Positive Bias: Gold (XAU/USD) traded around 2,740 on Tuesday, consolidating after a recent rally. The 200-period SMA near 2,683.88 continues to offer strong support, reinforcing the bullish sentiment. The 50-period SMA, positioned just above the current price at 2,750, serves as immediate resistance, with a break above potentially driving gold towards 2,780 and beyond. Failure to hold above the 200-period SMA could weaken momentum, exposing gold to a pullback toward 2,650. The broader outlook remains positive as long as prices stay above key support levels.

Market Movers:

  • GlobalFoundries Jumps on Strong Revenue Forecast: GlobalFoundries (GFS) surged over 14% in the Nasdaq 100 after reporting Q3 net revenue of $1.74 billion, surpassing the consensus of $1.73 billion. The company also issued Q4 guidance with revenue expectations between $1.80 billion and $1.85 billion, positioning the midpoint above the market consensus of $1.80 billion.
  • Palantir Technologies Soars on Upgraded Profit Outlook: Palantir Technologies (PLTR) climbed more than 23% to lead gainers in the S&P 500 after posting Q3 revenue of $725.5 million, exceeding the consensus estimate of $703.7 million. The company also raised its full-year adjusted operating profit forecast to between $1.05 billion and $1.06 billion, well above previous guidance of $966 million to $974 million.
  • Intel Leads Dow on Strong Sector Performance: Intel (INTC) rose over 3%, leading gains in the Dow Jones Industrial Average as chipmakers rallied on the back of positive earnings in the sector. Broadcom (AVGO), Micron Technology (MU), and Marvell Technology (MRVL) also gained over 3%.
  • Louisiana-Pacific Jumps on Better-Than-Expected Sales: Louisiana-Pacific (LPX) increased by over 6% following Q3 net sales of $722 million, surpassing the market forecast of $696.1 million. The stronger-than-expected revenue underscored the company’s resilience in its market, driving share price gains.
  • Celanese Corp Plummets on Weak Earnings Guidance: Celanese Corp (CE) dropped over 26%, leading the S&P 500’s decliners, after reporting Q3 adjusted EPS of $2.44, falling short of the consensus of $2.85. The company also provided disappointing Q4 guidance with an adjusted EPS forecast of $1.25, far below the market estimate of $2.94, triggering a sell-off in the stock.
  • Cleveland-Cliffs Falls on Revenue Miss: Cleveland-Cliffs (CLF) saw its shares decline by more than 11% after reporting Q3 revenue of $4.57 billion, missing the consensus estimate of $4.74 billion. The revenue shortfall dampened investor sentiment, leading to a notable drop in share price.
  • Hologic Inc Declines on Underwhelming Guidance: Hologic Inc (HOLX) dropped over 5% after issuing a 2025 revenue forecast of $4.15 billion to $4.20 billion, below the consensus of $4.21 billion. The lower-than-expected guidance raised concerns about future growth, pressuring the stock.
  • Boeing Faces Decline Despite New Labor Agreement: Boeing (BA) closed down more than 2%, leading the Dow’s losers, even as workers accepted a new labour contract. Bank of America’s statement that production ramp-up would require retraining for some employees added uncertainty, weighing on investor sentiment.

As election results continue to roll in, the markets remain on edge, digesting the initial outcome and potential impacts on the economic landscape. The Dow’s 400-point rally on Election Day, coupled with gains in the S&P 500 and Nasdaq, reflects investor optimism around the incoming administration’s policy direction. European and Asia-Pacific markets also displayed resilience, though uncertainties remain as the global market reacts to both the election and the Federal Reserve’s anticipated rate decision. With oil prices steady, fluctuating Treasury yields, and key corporate earnings in focus, traders are bracing for possible volatility as they assess the evolving political and economic landscape.