US futures, world markets rise as investors eye US election

U.S. futures rose and Asia markets were mostly higher today as investors worldwide awaited the results from the U.S. presidential election.

Just after 10 p.m. Eastern time, President Donald Trump and Democratic challenger Joe Biden were locked in tight races in battleground states.

Many investors took forecasts of a so-called “blue wave” of Democratic Party wins as a signal that the U.S. economy might soon get a big, fresh infusion of help. But with the race too close to call, analysts said they also might be reassured by the prospect for a continuation of Trump’s pro-market stance.

“Markets seem to be pricing in better chances for Trump, or at least a smaller chance of a blue wave,” Stephen Innes of Axi said in a commentary.

“On the one hand with the fiscal implications of a Biden win/blue wave that’s a bit of a surprise — on the other Trump is widely considered more market-friendly, so one can see how it nets out a small positive,” Innes said.

As of midnight Eastern time, Dow futures were up 0.8 percent and the S&P 500 futures rose 1.6 percent. Both initially fell as election returns began coming in. The Nasdaq futures fell back, losing 0.2 percent after earlier gaining 3.5 percent. The gains in the futures follow a strong performance in regular trading Tuesday on Wall Street.

In Asia, the Nikkei 225 in Tokyo jumped 2.1 percent to 23,783.29 today, while the Kospi in Seoul added 0.8 percent, to 2,361.70. India’s Sensex surged 0.9 percent and the S&P/ASX 200 edged 0.1 percent higher to 6,072.20.

The Hang Seng in Hong Kong was flat at 24,933.48, while the Shanghai Composite

Index also was almost unchanged, at 3,272.06.

Markets around the world were rattled in 2016 as results in the presidential election suggested Donald Trump was running ahead of Hillary Clinton. The S&P 500 slumped early the following day, but ended 1.1 percent higher.

The result of the presidential election might not be known for days because of the large number of Americans who voted early. More than anything, what investors hope for from the election is a clear winner to emerge, even if it takes some time. History shows stocks tend to rise regardless of which party controls the White House.

The biggest concern is that a contested election could drag on, inflicting still more uncertainty on markets buffeted this year by bouts of volatility amid the coronavirus pandemic.