Monday , September 27 2021

Wall Street surges more than 2% after congressional elections

Wall Street surges more than 2% after congressional elections
Wall Street – Reuters, JAKARTA – The three major stock indexes on the Wall Street exchange in the United States (US) compact rose more than 2% at the end of trading on Wednesday (11/07/2018), driven by the technology and health sectors when the market seemed calmer after the congressional elections in the country that is.

The S & P 500 index closed up 2.12% or 58.44 points at 2,813.89, the Dow Jones Industrial Average rose 2.13% or 545.29 points at 26,180.3, and the Nasdaq Composite index ended up 2.64%. or 194.79 points at 7,570.75.

As much anticipated, the Democratic Party won a majority of seats in the House of Representatives (DPR), while the Republican Party led by President Donald Trump maintained its dominance in the US Senate.

The biggest boost for the S & P itself came from the technology and health care stocks, with both indices posting a 2.9% increase. The consumer discretionary sector rose 3.1%, driven by an increase of 6.9% on shares.

"Now we are in a condition that can be understood by market participants again so they will be willing to make a repurchase. There is little concern out there, "Peter Tuz, president at Chase Investment Counsel Corp in Charlottesville, Virginia, told Reuters.

The movement of the CBOE Volatility index ended down 3.55 points at 16.36, the lowest closing level in around a month.

Although divided control in the US Congress will make it more difficult for the Trump administration to push for new laws such as additional tax cuts, investors do not see the possibility of a reversal of tax cuts and deregulation measures that have been put in place under his administration.

"These results might give paralysis for new policies," said Brian Nick, head of investment strategy for Nuveen Asset Management in New York. He added that growth sectors such as technology and health care would continue to be strong.

"In a scenario where there are no fiscal stimuli (additions) and we don't experience the worries of severe growth in terms of contractions, they are the best bet," he said.

Shares in health insurance companies Humana Inc, Anthem Inc, and UnitedHealth Group Inc. jumped to record highs when voters in three states agreed to expand Medicaid programs for low-income people.

But even as technology and health stocks soared, a number of investors questioned whether these sectors could now risk additional regulatory oversight.

Despite the strong gains on Wednesday, the S & P 500 index remained 4% below the record closing level that was able to be recorded in September, as investors continued to watch interest rate increases and the US trade war with China.

The US central bank's Federal Reserve starts a monetary policy meeting on Wednesday (7/11) local time. But the Fed is not expected to raise interest rates when it releases its policy decision on Thursday (8/11) local time.

The US monetary authorities' policy makers are expected to raise interest rates in December, the latest policy meeting this year.

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