U.S. stock futures jumped early on Wednesday as President Donald Trump led Democratic rival Joe Biden in Florida and other competitive swing states that will help decide the election.
S&P emini futures were last up 0.9%, extending a rally in Tuesday’s trading session, when the S&P 500 delivered its strongest one-day gain in almost a month.
Nasdaq 100 emini futures umped 2.6%, with some investors pointing to a lower threat of antitrust scrutiny for major technology companies under Trump than under a Biden presidency.
Trump led Biden in Florida, while other competitive swing states that will help decide the election outcome, such as Georgia and North Carolina, remained up in the air.
Longer-dated U.S. Treasury yields retreated from five-month highs and Mexico’s peso weakened sharply.
On betting website Smarkets, odds reflected a 56% chance of Trump winning, up significantly from 33% earlier in the day.
“Trump is just doing better on the margin everywhere, and there have not been any big Biden upsets,” said Bob Shea, Chief Executive Officer at TrimTabs Asset Management in New York.
“What we are seeing now is Trump doing better and people are just defaulting to ‘Trump is good for the market’, so why not just buy now and cut to the chase.”
Investors for months have said they favor a definitive, fast resolution to the election, rather than a drawn out process that many have feared. Quickly settling the election would clear the way for a deal on a stimulus package to help the damaged U.S. economy.
Early results also suggested the Democrats were less likely than previously expected to take the Senate from Republicans in a so-called blue wave, which could mean a more modest stimulus deal.
“The blue wave outcome that the markets were looking for has essentially gotten marked down from being a 90% possibility to a less-than-40% probability,” said Tom di Galoma, a managing director at Seaport Global Holdings in New York.
On election night 2016, U.S. stock index futures plunged as Trump pulled off an upset victory against Democrat Hillary Clinton. However, the next day marked the start of the so-called “Trump rally” that saw the S&P 500 jump 5% in a month, fueled by promises of massive tax cuts and financial deregulation.
The S&P 500 has climbed about 57% since Trump’s election in 2016, with the information technology index surging 149% and energy tumbling 56%, according to Datastream.
In Tuesday’s trading session, the Dow Jones Industrial Average rose 2.06%, while the S&P 500 gained 1.78% and the Nasdaq Composite climbed 1.85%.