As voters headed to the polls for the US midterm elections, the S&P 500 halted a three-day losing streak, with chip stocks that had been battered for days staging a rebound.
Polling stations across the United States were set to begin closing as early as 6 p.m. Eastern Time. Trading prices on the betting platform Polymarket indicated roughly a 95% probability that Democrats would win control of the House of Representatives and about a 77% chance of taking the Senate.
Joe Gilbert, a portfolio manager at Integrity Asset Management, said: "The market is positioning for a relief rally after the midterm elections. The sharp rotation seen over the past few months shows investors have been grappling with potential shifts in the political landscape."
Historical performance also generally favors equities after midterm elections. Data from Morgan Stanley shows that since 1982, in the six months following midterm elections, large-cap US stocks have risen an average of about 15% on a market-cap-weighted basis and 16% on an equal-weighted basis.
Tom Essaye, founder of The Sevens Report, said that while historical performance cannot guarantee future results, the S&P 500 has posted gains in the year following every midterm election since 1950. UBS Securities believes that favorable seasonal factors and light hedge fund positioning could set the stage for a post-midterm rally, with US stocks potentially recovering before the end of the year.
Among individual stocks, Apple fell 1.9% after the iPhone maker issued a mixed business outlook. Palantir Technologies dropped 1.7% after the software company's quarterly guidance pointed to a possible slowdown in revenue growth.
At the close in New York, the S&P 500 rose 0.4% to 7,568.92. The Dow Jones Industrial Average fell 0.4% to 51,786.72. The Nasdaq Composite gained 0.8% to 25,372.01. The Nasdaq 100 climbed 0.7% to 28,180.26. The Russell 2000 added 0.2% to 2,812.447. The Philadelphia Semiconductor Index advanced 2.6% to 10,600.396.
Comments