As Americans exercised their right to vote, the main U.S. stock index had its best day in six weeks on Tuesday, which could bode well for Democratic candidate Kamala Harris.
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The S&P 500 index gained 1.2% while the Nasdaq Composite rose 1.4% and the Dow Jones rose 1.0%.
When the S&P 500 ends higher on the day of a US presidential election, the ruling party’s candidate has a 75% chance of winning, according to Adam Turnquist, chief strategist at LPL Financial, cited by Forbes.
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There are, however, two notable exceptions: the 2020 election, where Donald Trump lost to Joe Biden, and that of 1968, when Democratic President Lyndon B. Johnson gave way to his vice-president, Hubert Humphrey, which was defeated by Republican Richard Nixon.
Enthusiasm for Trump fades
After climbing sharply for a good part of the day, the stock of Trump Media & Technology, a company in which the Republican candidate holds interests, closed down 1.2%. As for bitcoin, also associated with Mr. Trump for some time, it increased by 2.1% on Tuesday, giving up part of its morning gains in the afternoon.
The stock of technology firm Palantir exploded by more than 23% after reporting “sustained” demand for artificial intelligence.
According to the Polymarket prediction market platform, the probability that Donald Trump will win the American presidency reached 60% late Tuesday afternoon, compared to 62% the day before.
Instability in sight
Strategists at investment bank Goldman Sachs recently warned that markets could be buffeted by increased instability in the wake of the election, while noting that the U.S. economy remained strong.
Since the start of January, the S&P 500 has gained nearly 22%, making 2024 the best election year since 1936.
