[New York Stock Market] Waiting for Presidential Election Results, Stocks Rise in Unison... Nvidia Becomes No.1 in Market Cap

Presidential Election Main Voting Begins on the 5th
Unpredictable Election, Diverging Trends for Trump Beneficiaries
NVIDIA Surpasses Apple to Become No.1 in Market Cap

The three major indices of the U.S. New York stock market all closed higher on the 5th (local time), the day of the presidential election. As the main vote to elect the 47th president began, the two candidates were locked in a tight race, and the market waited for the election results without betting on the victory of either candidate. 'Trump beneficiary stocks' Bitcoin and Tesla rose, but Trump Media & Technology (DJT) fell. U.S. Treasury yields, which had risen when the Republican candidate, former President Trump, was likely to win, declined. On the same day, AI superstar Nvidia surpassed Apple to become the company with the highest market capitalization.

[Image source=UPI Yonhap News]

On that day in the New York stock market, the blue-chip-focused Dow Jones Industrial Average closed at 42,221.88, up 427.28 points (1.02%) from the previous trading day. The large-cap-focused S&P 500 index rose 70.07 points (1.23%) to 5,782.76, and the tech-heavy Nasdaq index jumped 259.19 points (1.43%) to close at 18,439.17.

By stock, Nvidia rose 2.85%, with its market capitalization swelling to $3.431 trillion, making it the most valuable company in the world. Apple rose 0.65% that day, recording a market cap of $3.377 trillion, losing the No. 1 market cap spot to Nvidia. Palantir Technologies soared 23.38% on strong quarterly results and sales outlook. Tesla jumped 3.54%. NXP Semiconductors showed a 5.17% decline due to a weak outlook amid macroeconomic concerns. DJT, the operator of the social networking service Truth Social owned by Republican presidential candidate former President Donald Trump, closed down 1.16%.

[Image source=UPI Yonhap News]

The election race remains unpredictable even on the day of the main vote. Democratic candidate Vice President Kamala Harris and former President Trump are locked in a tight race until the final moments. According to surveys by PBS News, public radio NPR, and polling firm Marist conducted the previous day, Vice President Harris recorded 51% support nationwide, leading former President Trump (47%) by 4 percentage points (margin of error ±3.5 percentage points). The key battleground states show mixed results depending on the polling agency. According to surveys released the previous day by political media The Hill and Emerson College, former President Trump led Vice President Harris in Pennsylvania, North Carolina, Georgia, and Arizona. Vice President Harris led former President Trump in Michigan. In Nevada and Wisconsin, the two candidates were tied. This is the exact opposite of the results from a New York Times (NYT) and Siena College survey two days earlier, where Vice President Harris held an advantage of 4 wins, 2 ties, and 1 loss in seven battleground states.

[Image source=Yonhap News]

The market showed no trend of betting on the victory of either candidate. Ryan Detrick, chief market strategist at Carson Group, analyzed, "There was a lot of hedging against potential uncertainty and drama in Washington," adding, "Now that it is election day, some of that (hedge investing) may unwind, which is optimistic."

As important as the presidential election results is which party, Democratic or Republican, will hold the majority in Congress. If the Democrats and Republicans split control of the House and Senate, the current status quo will be maintained, and the impact on the market is likely to be limited. On the other hand, if either party controls both chambers, significant policy changes could occur in government spending or tax cuts.

Alicia Levin, head of investment strategy and equities at BNY Mellon Wealth Management, said, "Whatever happens tonight, we view the market positively," and predicted, "We expect Congress to be divided (with Democrats and Republicans splitting control of the House and Senate), which would be the most positive outcome."

The market is also focusing on the upcoming regular meeting of the U.S. Federal Reserve's Federal Open Market Committee (FOMC) on the 7th. After the Fed cut the benchmark interest rate from 5.25-5.5% to 4.75-5.0% for the first time in September, another 0.25 percentage point cut is expected in November. According to the CME FedWatch tool, the federal funds futures market on that day reflected a 97.3% probability that the Fed will cut rates by 0.25 percentage points at the November FOMC. Investors' main focus is expected to be on Fed Chair Jerome Powell's press conference, which may provide hints about the pace of future rate cuts beyond this reduction.

U.S. Treasury yields are mixed by maturity. The 10-year U.S. Treasury yield, a global bond yield benchmark, was down 3 basis points (1 bp = 0.01 percentage points) from the previous trading day to 4.27%. The 2-year Treasury yield, sensitive to monetary policy, fluctuated around 4.19%, up 1 basis point from the previous day.

International oil prices rose on concerns that a storm hitting the Gulf of Mexico would reduce U.S. oil production. West Texas Intermediate (WTI) crude rose $0.52 (0.7%) to close at $71.99 per barrel, and Brent crude, the global oil price benchmark, increased $0.45 (0.6%) to close at $75.53 per barrel.