After rallying slightly on Election Day, financial markets swung wildly on Tuesday night and early Wednesday morning thanks to uncertainty from the too-close-to-call presidential election.
“We expect volatility to remain elevated,” Credit Suisse told clients early Wednesday. “Amid the lack of clarity, patience is required.”
U.S. stock futures oscillated between gains and losses as results came in on Tuesday night and Wednesday morning. The dollar also gained 0.4% against other top currencies.
The Dow Jones Industrial Average, S&P 500, and the Nasdaq composite are set to rise slightly on Wednesday morning as investors pour money into tech stocks, a common strategy that many have employed during a tumultuous year caused by the coronavirus-induced economic recession and political uncertainty.
Investors' expectations for the election providing a decisive “blue wave” in which Democrats won the House, the Senate, and the White House are not likely to be fulfilled, decreasing the likelihood of a generous coronavirus relief package.
The winner of the 2020 presidential election remains unknown, as several key battleground states have yet to finish counting ballots, and President Trump has raised concerns about fraud, raising the prospect of legal battles.
Both Trump and Democratic challenger Joe Biden have more than 200 of the necessary 270 electoral votes to win the presidency, but Michigan and Wisconsin are still tabulating votes, and counting in Pennsylvania could potentially take days. North Carolina and Georgia also remain uncalled, though Trump led in both states at press time.
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