Bitcoin and Stocks Go Up as Election Results Come In
USAWednesday, November 6, 2024
Advertisement
Advertisement
Tuesday night was an exciting time for investors. Futures on the Dow and S&P 500 climbed, and Bitcoin hit a new peak as early results from the U. S. presidential election rolled in. The U. S. dollar index also reached its highest level since July. Cryptocurrencies, often linked to former President Trump, soared too. Bitcoin surpassed $74, 000, setting a new record. Its previous high was set in March. Elon Musk, a backer of Trump, has also supported Dogecoin, which jumped over 20% in the last day.
In the initial results, Trump led Vice President Kamala Harris. But several key states hadn't been called yet. As the race between Harris and Trump is very close, economists are warning of potential market fluctuations. This could happen if the election results take days or even weeks to finalize. In 2020, it took several days to declare Joe Biden the winner. In 2000, the election between George W. Bush and Al Gore took over a month to resolve.
On Tuesday, the Dow, S&P 500, and Nasdaq all closed higher, indicating investor optimism. Stock markets often rise on Election Day. This year sees the sixth-straight Election Day gain for the S&P 500 and Nasdaq.
Louis Navellier from Navellier & Associates said in a note to investors that the market seems to be having a relief rally now that the election is here. Expect more market volatility, especially if the wait for results is long. Political divisiveness could affect investor sentiment. That said, markets have gone through election chaos before, like in 2000 and during the January 6 incidents.
Sectors of the market might react differently based on the leading candidate. A Harris lead could boost green energy and manufacturing stocks due to expected infrastructure spending and clean energy programs. On the other hand, tech and finance might face more regulations. A Trump lead would favor energy, finance, and industrial sectors, as investors hope for continued tax cuts and lenient regulations. But overall, stocks usually rise in the months after elections, driven by earnings, inflation, and interest rates.
Investors are preparing for a turbulent week. Two days after Election Day, the Federal Reserve will announce its latest interest rate decision, which is significant given new signs of a cooling labor market.
