Thus, investors have accepted the possibility of a split Congress in Washington beyond the name of the next U.S. president, with a Senate that will remain dominated by Republicans, reducing the chance of anti-market reforms if Joe Biden wins.
With a jump of 6.8 percent for the DJIA, 7.3 percent for the S&P 500 and 9 percent for the Nasdaq in 5 sessions, Wall Street also reported its best week since April, erasing the decline of the previous week, which had been the worst since March with losses of -6.5 percent for the DJIA, -5.6 percent for the S&P 500 and -5.5 percent for the Nasdaq. The rise was driven by all industries this week, but it was health and technology sectors that have gained the most from uncertainty about the results of the United States elections.
Financial markets were watching the possibility of a divided Congress with satisfaction beyond the presidential election, although the Democratic “blue wave” expected by some pollsters and feared by investors has not occurred. Democrats should still retain control of the House of Representatives, but have lost seats, while the majority in the Senate should be narrowly maintained by Republicans.
This is perceived to be beneficial to financial markets as it decreases the likelihood of substantial tax rises and legislative changes anticipated by Joe Biden, which would have a major effect on the values of technology and health.
However, the Senate’s power was no longer as evident on today, and could not be decided until January. Indeed, in the state of Georgia, where two Senate seats are at stake, the election is very close. It seems that in the first round, none of the candidates earned more than 50 percent of the votes, leading to a second round (a “runoff”) to be held on January 5 in this state. Job growth continues, but at a slower pace, as the presidential election continues to hold a high focus, investors also watched the new U.S. jobs figures on Friday, confirming the recovery of the economy in the recent months.