Wall Street stock futures higher as US presidential election unresolved

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Asian shares advanced Thursday after stocks rallied on Wall Street as investors embraced the upside of more gridlock in Washington, sending the S&P 500 index up 2.2% while the outcome of the U.S. presidential election remained in limbo.

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Hong Kong’s benchmark led the region, gaining 2.6%, while shares also rose by more than 1% in Tokyo and South Korea.

Overnight, the S&P 500 rose 2.2% for its best day in five months. The benchmark index had gained 3.5% before the market lost some of its momentum toward the end of the day.

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The Nasdaq was the standout, notching its biggest gain in more than six months as traders doubled down on technology stocks that are seemingly immune to pandemic shocks that bring more and more activity online.

Asian shares advanced Thursday after stocks rallied on Wall Street as investors embraced the upside of more gridlock in Washington, sending the S&P 500 index up 2.2% while the outcome of the U.S. presidential election remained in limbo. (Photo by

The U.S. dollar slipped to 104.32 Japanese yen from 104.26 yen. The euro strengthened to $1.1743 from $1.1736.

The future for the S&P 500 gained 0.8%, while the Dow industrials’ future added 0.6%. Overnight, Dow futures were up 338 points (1.20%), while Nasdaq futures were up 308 points (2.56%) and the S&P was up 55.50, or 1.59%.

The fate of the U.S. presidency remained undecided as neither President Donald Trump or Democratic challenger Joe Biden had secured the 270 Electoral College votes needed to win by early Thursday. So far, the markets have acted as if the occupant of the White House might be a secondary concern.

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“Notions that election uncertainty amid threat of a drawn out legal contest for the White House and Congressional gridlock (Democrat House-Republican Senate impasse) would have spooked markets couldn’t be further from the truth though,” Mizuho Bank said in a commentary. “Instead, markets have been happy to presume that this Democrat White . . . House and Republican Senate is the ‘Goldilocks’ outcome. In other words, a ‘Goldilocks Gridlock.”’

With Republicans edging closer to retaining control of the Senate, prospects dimmed for the tax increases and tighter regulations on businesses that investors expected if Democrats had scored an electoral sweep. However, a big stimulus effort for the economy that many economists and investors are pushing for now seems less likely.

By making additional stimulus less likely, a divided U.S. government could force the Federal Reserve to do even more on its own to support the economy, which could send the dollar lower against the euro and other currencies.

The Fed is meeting this week and had been due to announce its latest decision on interest rate policy on Thursday. But it may hold off on determining whether and how to expand the economic support it has been supplying through ultra-low interest rates until after final election results are confirmed.

Central banks helped Wall Street soar since March by cutting interest rates to record lows and propping up bond markets. The Fed now faces more pressure for economic support given the failure of Congress to provide more aid for struggling individuals and businesses.

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U.S. government bonds have gyrated, with the 10-year Treasury yield jumping from 0.88% to 0.94% on Tuesday as polls were closing and then sinking after Trump made premature claims of victories in several key states, Republicans held onto Senate seats and economic data came in weaker than expected. It was at 0.74% on Thursday.

It may take days for a winner of the White House to emerge, and professional investors say they’re bracing for sharp market swings in the meantime. The Trump campaign on Wednesday has filed lawsuits over the voting in several battleground states. Earlier, the president said he’d take the election to the Supreme Court, though it’s unclear exactly what he meant by that.

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Stocks tend to rise regardless of which party controls the White House. What happens with the coronavirus pandemic is likely to have a much greater effect on markets than this election’s results, fund managers say.

The news in that department was not encouraging. The U.S. reported a record of more than 86,000 newly confirmed infections on Wednesday.

Cases and hospitalizations are setting records all around the country just as the holidays and winter approach, demonstrating the challenge that either President Donald Trump or former Vice President Joe Biden will face in the coming months.

In Asia on Thursday, the Hang Seng in Hong Kong was at 25,532.56 while Tokyo’s Nikkei 225 index climbed 1% to 24,105.28. South Korea’s Kospi jumped 2.1% to 2,405.99. In Australia, the S&P/ASX 200 gained 0.9% to 6,139.60. The Shanghai Composite index rose 0.9% to 3,307.17.

U.S. benchmark crude oil lost 59 cents to $38.56 per barrel in electronic trading on the New York Mercantile Exchange. Overnight, it gained $1.49 to $39.15 per barrel. Brent crude, the international standard, gave up 62 cents to $40.61 per barrel.

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