Bitcoin, stock futures and dollar rise as election results roll in

New York
CNN
—

U.S. stocks rose in after-hours trading on Tuesday evening and bitcoin hit a new record high as Wall Street digested early presidential election results.

Dow futures jumped more than 600 points, while the S&P 500 jumped half a percentage point as early election results poured in Tuesday night. The US dollar index hit its highest point since July.

Cryptocurrencies, which are considered part of the so-called Trump trade, also jumped on Tuesday. Bitcoin surpassed $74,000 to hit an all-time high on Tuesday evening. Its previous record was set in early March. Former President Donald Trump has previously expressed his support for cryptocurrencies.

Dogecoin, the volatile cryptocurrency championed by Elon Musk, a high-profile backer of Trump, jumped more than 20% over the past day.

While Trump led Vice President Kamala Harris in early returns, several key battleground states had yet to be called Tuesday night.

Still, with the race between Harris and Trump unusually tight, economists warn of potential volatility ahead, especially if the results take days — or even weeks — to finalize. In 2020, it took several days to declare Joe Biden the winner, while the 2000 election between George W. Bush and Al Gore famously dragged on for more than a month.

The Dow closed 425 points higher Tuesday, or 1%; S&P 500 rose 1.2%; and the tech-heavy Nasdaq rose 1.4%, all underscoring investor optimism as Americans cast their ballots.

Historically, stocks have often risen on election day. This marks the sixth straight election day gain for the S&P 500 and Nasdaq.

“The market appears to be in an anticipatory relief now that the election is here,” Louis Navellier of Navellier & Associates said in a note to investors on Tuesday. “While it’s still anybody’s call where the chips will fall in the election, it’s a relief to put it behind us in either direction.”

The prospect of a delayed or disputed result can amplify market volatility.

“With Election Day finally here, expect more market volatility, especially if the wait for a result is long or contested. Political divisiveness poses a risk to investor sentiment,” said Adam Turnquist, chief technical strategist for LPL Financial.

“Though after going through the ‘hanging chads’ of the 2000 Bush vs. Gore election, legal challenges, accounts and the experience of Jan. 6, markets may be battle-tested for election mayhem,” Turnquist added.

As results begin to pour in, sectors of the market may react differently based on the leading candidate. A lead from Harris could lead to gains in green energy and manufacturing stocks, given expected boosts to infrastructure spending, clean energy and social programs. However, technology and finance may be subject to greater regulatory scrutiny. A Trump leadership would favor the energy, financials and industrials sectors, where investors expect continued tax cuts and a lenient regulatory stance, Turnquist said.

Still, stocks have historically moved higher in the months following an election regardless of the outcome. “Most stock price movements over time are driven by earnings, inflation and interest rates. Politics matters, especially tax and trade policy, but not as much as some might think,” Turnquist said.

Traders are bracing for a turbulent week. Just two days after Election Day, the Federal Reserve will announce its latest interest rate decision, the first since cutting interest rates by half a point. The Fed’s announcement comes amid new data showing signs of a cooling labor market, adding another layer to an already stacked week for markets.

This story is in development and will be updated.