Stock market increases on election day

The US stock market rose in trading on Tuesday as voters rushed to the polls and the nation awaited the results of a closely contested presidential election.

pThe &P 500 ticked up about 1.2%. The Dow Jones Industrial Average gained more than 400 points and rose about 1%. The technology-heavy Nasdaq rose 1.4 per cent.

Profits at big tech companies are helping to boost the market. Shares of Nvidia, an artificial intelligence chipmaker, rose nearly 3% in early trading.

At market close, tech giants Meta and Amazon had each seen shares rise around 2%.

Nasdaq briefly halted trading in Trump Media and Technology Group Corp, the media company owned by former President Donald Trump. The share price fell sharply over a 15-minute period in the afternoon, falling from $37 to $34. Shares ultimately closed at $33.94.

The overall market recovery follows a flurry of largely positive economic news in the past week. Government data released last week showed robust economic growth over a recent three-month period, along with a continued cooling down of inflation.

U.S. hiring slowed in October, but fallout from hurricanes and labor strikes likely caused an undercount of the nation’s workers, US Bureau of Labor Statistics showed data Friday.

Ivan Feinseth, market analyst at investment firm Tigress Financial, attributed the return on Tuesday to eager anticipation among investors to get past the US election.

“The nightmare of an endless election and a contentious fight has consumed a lot of focus and attention. It’s almost over. Then it’s back to market fundamentals,” Feinseth said.

The election day gains extended a banner year for US stocks. pThe &P 500 and Nasdaq are each up more than 20% this year, while the Dow Jones is up about 11%.

The performance is due to enthusiasm around artificial intelligence as well as robust economic growth and expectations that interest rates would ease, Feinseth said.

The Federal Reserve cut its benchmark interest rate by half a percentage point in September, reversing its years-long fight against inflation and providing relief to borrowers troubled by high costs.

The Fed is generally expected to cut interest rates by another quarter of a percentage point when it meets on Thursday, according to CME FedWatch Tool, a measure of market sentiment.

Anticipation of interest rate cuts among investors often sends stocks higher, as lower interest rates pave the way for cheaper corporate loans and the potential for higher profits.

“The market is looking to the future and the Fed is now on the bull side,” Feinseth said.

Across the span of the next administration, the market is likely to move higher regardless of whether the nation elects Vice President Kamala Harris or former President Donald Trump, experts previously told ABC News. However, each candidate’s policies may favor different types of stocks while posing unique risks, they added.

Trump has proposed a combination of low corporate tax rates and loose regulation that is likely to boost corporate profits and drive the stock market higher, experts said. Prices are likely to rise under Harris, as they have under President Joe Biden’s economic leadership, they added.