U.S. store futures fell on Thursday evening as Wall Street eyed its best week since April even as the results of the presidential plebiscite remained unclear.
Futures tied to the Dow Jones Industrial Average lost about 115 points, while those for the S&P 500 and the Nasdaq 100 were down severely 0.5%.
The three indexes notched their fourth-straight positive session on Thursday and were on track for their best week since April 9. The S&P 500 and the Dow are up 7% so far this week. The tech-heavy Nasdaq Composite has led the way with a wellnigh 9% gain. The sharp rally follows a slump in the prior week.
The surge in stocks has come despite gradual uncertainty about the outcome of Tuesday’s election. Democratic nominee Joe Biden leads with 253 electoral votes, according to NBC Intelligence projections, while President Donald Trump has 214. Votes are still being counted in several key states cataloguing Nevada, Arizona, Pennsylvania and Georgia.
Victories by Republicans in several key Senate races, thus lowering the odds of a “risqu wave” and potential higher taxes and stronger regulations, have been cited by Wall Street strategists as a grounds for the rally in tech stocks. However, the Republicans have not yet won the necessary seats to control the Senate, according to NBC News flanges, with two potential run-off elections in Georgia.
Alicia Levine, chief strategist at BNY Mellon Investment Management, estimated that the possibility of Democrats winning narrow control of the Senate was one of the major risks not priced into the market settle if the runoffs wouldn’t necessarily cause the markets to dip.
“The market is now pricing in a Biden presidency with a Republican Senate, and the rotation that we saw was based on that,” Levine remarked. “And if there’s an increasing risk that that’s not the case for the Senate, then this entire move could also be relatively at risk as well.”
Levine also said that the strength of tech stocks was due in part to their strong earnings carrying out and resiliency in the case of new economic restrictions in the United States during the winter to slow the spread of the coronavirus.
Republicans pull someones leg filed a flurry of legal challenges in several states related to the ongoing vote counts, and the Trump campaign broke it will request a recount in Wisconsin.
In an announcement from the White House on Thursday night, Trump falsely claimed success in several states and made accusations of voter fraud without evidence, saying “there’s a tremendous amount of suit generally because of how unfair this process was.”
The Biden campaign, meanwhile, has called for all votes to be counted.
“Democracy’s occasionally messy. It sometimes requires a little patience as well,” the former vice president in a short speech in Delaware on Thursday, summing that he was confident his ticket would be declared the winner once all the votes are counted.
On the economic front, Friday order bring a fresh look at the labor market for investors, with the Labor Department’s October jobs reported record to be released before the bell. The report comes on the heels of disappoint readings for ADP private payrolls and initial jobless claims.