4:15pm: Election day surge
Wall Street rallied on Tuesday as voters headed to the polls, with major indices ending the day in positive territory.
The Nasdaq Composite rose 1.4%, marking its best day since early October, while the S&P 500 climbed 1.2% and the Dow Jones added 1%, recovering over 400 points.
Trump Media & Technology Group saw its stock briefly halted due to volatility, reversing Monday's gains to close down 1%.
Palantir was a standout performer, surging 23.5% after reporting strong third-quarter earnings driven by government spending on its AI technology.
Meanwhile, Nvidia overtook Apple as the world’s most valuable company, with a market cap of $3.43 trillion compared to Apple’s $3.38 trillion.
2.30pm: Election should be good for markets
Stocks have shown encouraging trends following US election results in the last two times, but 'when will we know who wins?' is the question.
Thomas Simons, part of Jefferies equity strategy team, says he has been telling clients "We do not know, but it won't likely be Tuesday night"
The das following the last US election in 2020 were memorable for many reasons, including that an inability to call the result until the Friday, with the Associated Press malinmg their projection the following day, before Donald Trump's team filed dozens of lawsuits contesting the results throughout November, but eventually announced a "pseudo-concession" on Thanksgiving and Biden finally clinched the win on December 5 when California certified their results, giving him enough delegates to win the electoral college vote, which was to be held nine days later.
"By contrast, Trump was projected as the winner by 2:45am Eastern on election night in 2016. In 2008 and 2012, Obama was the clear winner before midnight both times. John Kerry waited until 11:00am the day after election day in 2004, and Bill Clinton was projected to be the winner of the 1996 election by 9:00pm Eastern on election day, hours before many west coast polls had even closed," says Simons.
"Given the parties involved and the histrionics around the 2020 election, we are concerned that we might go a few weeks without an official result this time around.
"By the same token, we may not know the results of the vote for the House of Representatives either. Polls have flipped from Lean-Democrat to Toss-Up in several districts of New York and California and some states have automatic triggers for hand recounts or run-off elections to determine results when the vote share is within a certain margin."
While it could take some time before we know, Simons points to a "silver lining" for the 2024 election that early voting numbers are hitting record highs, and after poopooing the practice in 2020 and 2022, Trump and other GOP candidates have embraced the practice this time.
"So we should not have the same sort of blue or red mirage results that we saw in 2020 since mail-in and in-person votes will be less biased toward any particular candidate."
As for the market reaction, his colleague Mohit Kumar says elections are "more of an event risk that needs to be behind us before investors are ready to deploy risk".
So, assuming there is no contested election with weeks of uncertainty, he sees risky assets like stocks performing post elections to year-end.
"Any dips would thus be a buying opportunity, in our view," says Kumar, with a broader constructive view on the markets driven by the simple logic that the economy is "doing fine and central banks are ready to cut rates".
The Jefferies team noted that in the last two election years, performance in the last two months of the year saw small caps jump over 21% versus mid caps at circa 13% and large caps at 11.2%.
"We do not expect that good of a close to '24, but think the Russell could rally to 2420 or about a 10% gain from here."
1:20pm: Predicting election results
Polls and prediction markets indicate a tightening race between former President Trump and Vice President Harris.
Trump's advantage in Polymarket has decreased to 22%, down from over 30%, while prediction site Kalshi shows him as a 17% favorite, a drop from 26% last week. On PredictIt.org, his chances have plummeted to just 4%.
Polls reflect a close contest, with the Real Clear Politics average showing both candidates nearly tied.
Additionally, the S&P 500’s positive performance in the three months leading up to the election suggests a potential Harris victory, while the improving Misery Index also leans toward Harris winning.
12:30pm: Voters cast their ballots
Stocks were trading higher at midday with Election Day underway, as investors focused on the closely contested presidential race between Kamala Harris and Donald Trump.
The Nasdaq Composite led the gains, rising about 1.1%, while the S&P 500 increased by approximately 0.9%, and the Dow Jones Industrial Average climbed around 0.7%.
With polls indicating a tight race, market volatility is expected, especially since the election outcome may take days or weeks to determine if disputed.
Despite potential short-term turbulence due to uncertainty, historical trends suggest that such situations rarely derail long-term market gains.
11:10am: Markets remain calm
US markets "aren’t showing many signs of nervousness" with voting underway, IG's Chris Beauchamp said as Wall Street was firmly in the green on Tuesday morning.
"While the political tension in the US has been ratcheted up to a high level, the market has remained calm, showing some of the usual pre-election weakness but otherwise holding steady," Beauchamp said.
"A clear winner within the next day would be the ideal outcome here, while a long, drawn-out legal challenge is likely to keep bullish sentiment in check.”
9.54am: Wall Street in positive mood early on
Wall Street opened in a positive mood on Tuesday as Americans headed to the polls to vote in the knife-edge US election.
The Nasdaq jumped 0.6% as trading got underway, while the S&P 500 climbed by 0.4% and the Dow Jones added 0.1%.
Polls still failed to split Kamala Harris and Donald Trump as voting got underway on Tuesday, leaving fears over a delayed outcome.
“We think that financial markets are pricing for a Trump victory,” XTB analyst Kathleen Brooks noted.
“Thus, a win for Harris could lead to a short-term sell-off in the dollar, gold and potentially in US stocks.
“This could also boost global equities, as Harris is seen to be less tempted to slap tariffs on imports.”
Bond yields remained inflated at 4.32% on 10-year treasuries as trading kicked off in New York, while the dollar sank further to £0.7683, taking the greenback’s decline for the day to 0.45%.
7.39am: Wall Street seen higher on election day
Wall Street appeared in a positive mood as US election day arrived on Tuesday and traders awaited whether Kamala Harris or Donald Trump would be named president.
Futures had the Nasdaq up 0.3% ahead of Tuesday’s opening bell, while the S&P 500 and Dow Jones were seen 0.2% and 0.1% higher respectively.
Each had dropped on Monday as the election loomed, with polls on Tuesday still pointing to a neck-and-neck race for the White House as voting opened.
Bonds faced a sell-off on Tuesday morning as eyes turned to the election, with the yield on US 10-year treasuries climbing three basis points to 4.32%.
The dollar lost further ground in the meantime, falling by 0.25% to £0.7699.
“As has been made abundantly clear, the polls are so close that it’s impossible to say that one candidate has an advantage,” Trade Nation analyst David Morrison commented.
“The worst outcome will be if there’s a delay in calling the result. Typically, it’s clear who’s won by Tuesday night or Wednesday morning.
“That’s the case ahead of every election, but it’s also worth noting that longer-term risk indicators are flat.
“This means that neither candidate is seen as a market risk, even though it’s likely that we see some sharp moves overnight, particularly if early exit polls subsequently prove inaccurate.”