On Wednesday, investors responded to election result uncertainty by heavily backing proven winners and market leaders, and this saw an enormous uptick in US big tech stocks.
After making upwards movements of around 3% in futures, the tech-laden Nasdaq Composite then saw additional growth, up around 4% – at 11,605 points.
This tech stock storm was led by gains posted by the big FANMAG members; with Apple (NASDAQ:AAPL) bouncing over 4%; Amazon (NASDAQ:AMZN) surging over 5%; Netflix (NASDAQ:NFLX) up 4%; Alphabet (NASDAQ:GOOGL) storming over 6%; Microsoft (NASDAQ:MSFT) up more than 4%; and Facebook (NASDAQ:FB) hiking more than 7%.
Also worth noting is that despite running out of steam – having rallied around 10% since Monday morning – Tesla mustered the energy to make modest gains. Meanwhile, having won a California bid to classify drivers as contractors, Uber added a notable 14% rally on Wednesday.
These big tech gains weren’t quite matched by other sectors, but their positive trajectory did incentivise US equities to climb more broadly. Indeed, the S&P 500 rose by over 2.7%, to 3,462 points.
Similarly, the Dow Jones rallied by around 2%, or more than 500 points. Significantly, this saw the index break the 28k benchmark for the first time in almost two weeks – reflecting some positive sentiment being injected back into equities, as investors come to terms with the election uncertainty. Perhaps, as seen with today’s big tech boom – the indecisive election hasn’t been quite as bad as many had feared.
For now, and coming towards the latter stages of trading in Europe, it appears that Biden has edged slightly ahead, with leads being eked out in Wisconsin and Michigan. As stated by Spreadex Financial Analyst, Connor Campbell, investors may also be buying back into the idea of a Biden win:
“It appears that once again investors are buying into a Joe Biden presidency, despite the race – which could still have days left in it yet – being on a knife-edge.”
“[…] Investors seem to be taking a kind of win-win attitude to the election. Yesterday’s growth was based on the hopes of a blue wave-led stimulus package. Now that the race is much tighter, and the Democrats have little chance of taking the Senate, the markets are celebrating the likelihood of preserved tax cuts and no healthcare reform.”