US stocks appeared headed for a choppy trading session on Wednesday as Wall Street parsed early results from the too-close-to-call presidential election.
Futures contracts tied to the Dow Jones industrial average dropped by 35 points, or roughly 0.1 percent, to 27,341.00 as of 7:09 a.m. after a volatile overnight session as President Trump and Joe Biden remained in a dead heat with thousands of votes left to count.
But Nasdaq 100 futures surged 2.3 percent as investors headed for the relative safety of Big Tech stocks such as Amazon, Apple and Netflix. Futures for the benchmark S&P 500 fell in the middle, climbing about 0.6 percent as of 7:10 a.m.
Wall Street was poised to follow European stocks higher, pointing to relative calm in the markets despite uncertainty about the election’s winner and fears of civil unrest. London’s FTSE 100 was up 0.5 percent as of 7:01 a.m., while Germany’s blue-chip DAX index rose about 0.3 percent and Paris’ CAC 40 jumped nearly 0.7 percent.
“While the markets look perfectly comfortable with how things are going, with only modest risk aversion being seen and stock markets doing quite well under the circumstances, that may not continue if unrest and challenges follow,” OANDA senior market analyst Craig Erlam said in a commentary.
While Trump performed better than recent polls predicted, more than half a dozen states remained too close to call early Wednesday, including key battlegrounds in Pennsylvania, Wisconsin and Michigan. Election officials have yet to count many mail-in ballots that are expected to favor Biden, but Trump declared himself the likely winner as he made unproven claims of fraud by Democrats.
Stocks advanced early Wednesday despite the election’s uncertain prospects for a new stimulus bill to address the economic fallout from the coronavirus pandemic.
Hopes for another spending package regardless of who wins the White House had fueled Wall Street’s gains at the start of the week, but Republicans appeared to maintain control of the Senate, which could lead to a continued stalemate in negotiations with the House of Representatives.
“The bigger problem now is that a new fiscal stimulus is now very unlikely in the foreseeable future, given the potential for extended legal action in coming weeks before a winner emerges, and even then we can look forward with trepidation to the president (whoever that is) having to battle lawmakers to get a stimulus bill through,” said Chris Beauchamp, chief market analyst at IG.