U.S. stocks rose on Monday as investors braced for the election results and expected a recovery from the worst weekly fall in indexes since March.
Stocks are poised to face increased volatility in the run-up to Tuesday's election. The results, particularly in the Senate race, could determine whether tax incentives will be introduced early next year. While former Vice President Joe Biden enjoyed the lead in the polls, President Donald Trump could have achieved the same unexpected victory as he did four years ago. Any contested results and legal battles will almost certainly fuel an unsustainable price action.
"One day before the presidential election, the stock market will undoubtedly take a wait-and-see attitude, and traders will be wary of the disputed election results," said Mark Chaikin, founder of quantitative research firm Chaikin Analytics.
Here are the positions of the U.S. indices shortly after the opening of 9: 30 am ET on Monday:
As if the election wasn't enough for investors, the Federal Open Market Committee is set to meet on Wednesday and Thursday to continue discussing its political response to the coronavirus recession. The group is expected to largely keep interest rates at historic lows. Federal Reserve officials have hinted that the central bank could increase the rate of asset purchases from $120 billion a month to further support the economic recovery.
More than 74,000 new cases of COVID-19 were reported in the United States on Sunday, and the death toll in the U.S. over the weekend exceeded 230,000. When Britain joins Germany and France in imposing partial blockages, some fear that the US will take similar steps to prevent the spread of the virus.
Monday's rise recovered some of last week's major losses. Markets collapsed at the end of October as an increase in coVID-19 cases and disappointing technical gains triggered a sell-off. The Dow Jones industrial average slid into the correction zone, while the S'amp;P 500 and the Nasdaq followed closely.
Dunkin' Brands jumped sharply after agreeing to acquire Inspire Brands for $11.3 billion. The deal - one of the largest in the restaurant industry - will secure Dunkin' Private at a price of $106.50 per share, up 20% from the October 23 closing price.
Rival Tesla Nio jumped sharply after the automaker announced it had doubled its October car shipments to 5,055.
Bitcoin climbed to $13,877.48 on Sunday before hovering around the $13,400 mark on Monday morning. The weekend rally re-ignited momentum that faded during last week's gloomy sessions.
Spot gold rose 0.5% to $1,888.12 an ounce. The yields of the US dollar and Treasury bonds have hardly changed.
Oil futures plunged to five-month lows before covering most of their losses. West Texas Intermediate crude fell as much as 6% to $33.64 per barrel. Brent crude, the international benchmark, sank 5.7 percent to $35.76 a barrel at intraday lows.