Nov. 2 (UPI) — The three major U.S. indexes rose to set off the month of trading on Monday as markets prepared for Election Day and the potential effect of the result on long-awaited stimulus.
The Dow Jones Industrial Average climbed 423.45 points, or 1.6%, while the S&P 500 increased by 1.23%. The Nasdaq Composite gained 0.42% as its rise was limited by declining tech stocks.
Analysts predicted that the results of the presidential election the various Senate races could lead to an end in the ongoing stalemate in negotiations over another round of stimulus in response to the COVID-19 pandemic.
“We have been emphasizing that the Senate outcome is important for the trajectory of fiscal policy,” Citi economist Andrew Hollenhorst said.
“Under any election scenario, we expect a $1.5 trillion plus fiscal package, possibly as early as just post-election.”
The Treasury Department on Monday, however, scaled back its estimates for borrowing through the end of the year, predicting it would borrow $617 billion from October through December down from $1.22 trillion estimated in early August.
Matt Maley, chief market strategist at Miller Tabak, said in a note Sunday that the market sell-off ahead of election day helps to reduce risk in the event of a contested result.
“Even though we’re worried that there could still be one more wave down if we get another big influx of uncertainty, we think the stock market is now setting up nicely for a nice net advance over the next two months or so,” Maley said.
The major averages entered the month coming off of their worst week since March 20 amid rising COVID-19 cases throughout the country.