U.S. stocks jumped on Thursday as investors bet Republicans would hold onto the Senate and prevent changes under a possible Joe Biden White House that would crimp corporate profits.
With votes still being counted in battleground states, investors abandoned cautious preelection positioning, driving Wall Streets main indexes up for a fourth straight session.
SP emini futures dipped 0.3 late in the day as Democratic candidate Biden edged closer to defeating Republican President Donald Trump, with the contest hinging on a dwindling number of uncounted votes..
While investors widely expect a fiscal stimulus package, the size of a deal reached in a divided Congress is likely to be much smaller than it would be under a Democraticcontrolled Congress. That could pressure the U.S. Federal Reserve to pump more funds into the financial system, supporting equity prices.
Also on Thursday, the Fed kept its loose monetary policy intact and again pledged to do whatever it can to sustain an economy crippled by the coronavirus pandemic. In a poststatement press conference, Chair Jerome Powell said the Fed would not consider directly funding fiscal activities.
They stayed with what the market had expected, said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey. Given the scenario of an election where youre still counting ballots, it would be very difficult for the Fed to insert itself at this point.
Betting odds heavily favor Biden, with the…