US Election Results Day: S&P 500, Dow, Nasdaq Soar – But Will the Rally Hold? Trump Tied Stocks See Volatility

As the US election nears ends, the major indices -- S&P 500, Dow Jones, and Nasdaq -- closed sharply higher on Tuesday. However, despite the rally, investors are expecting a volatile week ahead as the counting of votes is underway in an extremely tight US Presidential race. The Dow Jones Industrial Average climbed 427.28 points, or 1.02%, to 42,221.88. The S&P 500 surged 70.07 points, or 1.23%, to 5,782.76, while the Nasdaq Composite rose 259.19 points, or 1.43%, to 18,439.17.The election is set for a nail-biting finish as the latest polls showed Republican Donald Trump and Democrat Kamala Harris locked in a tight race and the margins are expected to be very thin. Due to the uncertainty around the election results with political experts finding it difficult to call, the market has remained cautious in recent times, Reuters reported. Volatility was more pronounced in the government debt and currency markets. The 10-year US Treasury yield jumped over 10 basis points to a high of 4.366%, before easing slightly following a strong auction, ending the day down 2 basis points. Meanwhile, equity markets remained stable, driven by expectations of a soft economic landing, supported by solid corporate earnings, lower interest rates, and a resilient labor market.Economic data released on Tuesday revealed the trade deficit hit a 2.5-year high in September, driven by strong domestic demand and a rush to import goods ahead of potential higher tariffs under a Trump presidency. Despite this, the CBOE Volatility Index (VIX), Wall Street's "Fear Gauge," ended at 20.49, slightly above its long-term average of 19.46, but down from last week's two-month peak of 23.42.S&P 500 sectors saw industrials rise 1.67% and consumer discretionary climb 1.83%, leading the day's gains, with five sectors up at least 1.3%. Investors are closely watching the upcoming Congressional elections, with many analysts predicting a split government that could limit the president's ability to pass major policy changes.

Stocks Tied to Trump See VolatilityStocks tied to a potential Trump victory saw significant volatility. Trump Media & Technology Group surged by 18.64% before dropping 8.42%, with shares eventually closing down 1.16%. Crypto-related stocks followed Bitcoin’s 3% rise, as Trump positions himself as a supporter of the sector. Palantir saw a 23.47% surge to close at a record $51.13 after raising its revenue forecast for the third time this year. Federal Reserve's Upcoming Policy DecisionThe Federal Reserve is set to announce its latest policy statement on Thursday, with markets largely expecting a 25-basis point interest rate cut. However, due to the strength of the U.S. economy, uncertainty remains about the future pace of easing.On the NYSE, advancing issues outnumbered decliners by a 4.44-to-1 ratio, while the Nasdaq saw a 2.67-to-1 advance. The S&P 500 posted 23 new 52-week highs and seven new lows, while the Nasdaq recorded 110 new highs and 104 new lows. Total trading volume on US exchanges was 12.64 billion shares, higher than the 11.77 billion average over the past 20 trading days.