Wall Street set to jump after Biden election win

(Reuters) – U.S. stock index futures pointed to a sharply higher open for Wall Street’s main indexes on Monday after President-elect Joe Biden was declared the winner in a highly contentious election.

FILE PHOTO: A Wall Street sign is seen outside the New York Stock Exchange, September 30, 2008. REUTERS/Lucas Jackson

Biden’s victory in Pennsylvania on Saturday put him above the 270 Electoral College votes needed to secure the presidency, four days after Election Day, although President Donald Trump does not plan to concede anytime soon.

The MSCI world equity index hit a record high as expectations of better global trade ties and more monetary stimulus under Biden supported global risk appetite. Futures tracking the S&P 500 and the Nasdaq were within striking distance of their own all-time highs.

U.S. stocks had closed Friday’s session little changed on the day, but each of the three major indexes still managed to notch their biggest weekly percentage gains since April, in part due to the belief that Congress will remain divided.

“The fact that Biden has won by quite a margin reduces the chances of a contested election or at least a serious long contested election and that’s what’s driving the positive sentiment today,” said ING economist Bert Colijn.

With the S&P 500 sitting just 2% from its Sept. 2 closing record, headwinds remain for equities, including a surge in coronavirus cases that could lead to fresh government lockdowns, with total U.S. cases approaching 10 million.

A fiscal stimulus package to combat the economic damage done by the coronavirus is also less likely to be broad. While U.S. Senate Majority Leader Mitch McConnell last week indicated he desired a bill by the end of the year, he said on Friday that economic statistics show Congress should enact a smaller plan.

At 06:13 a.m. ET, Dow E-minis were up 1.44%, S&P e-minis gained 1.50% and Nasdaq 100 E-minis rose 1.84%.

Technology heavyweights, which have dominated Wall Street’s recovery from its coronavirus-lows this year, rose between 1.0% and 2.5% in premarket trading.

Big U.S. banks including Citigroup Inc, Bank of America Corp and Goldman Sachs Group Inc were up about 1%, while trade-sensitive industrials Boeing Inc and Caterpillar Inc gained about 2%.

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