U.S. Markets Rally Amid Election Drama and NVIDIA's Historic Surge
U.S. stock markets advanced on Monday, with all three major indices closing higher. By the end of the trading session, the Dow Jones Industrial Average increased by 1.02% to 42,221.88 points, the S&P 500 rose by 1.23% to 5,782.76 points, and the Nasdaq Composite climbed 1.43% to 18,439.17 points.
In the backdrop of the ongoing U.S. presidential election, attention remains firmly fixed on the unfolding political scenario. Voting officially commenced at midnight local time in the small town of Dixville Notch, New Hampshire, signaling the start of the 60th U.S. presidential election. The major candidates are Vice President Kamala Harris for the Democrats and former President Donald Trump for the Republicans. With both candidates neck-and-neck in the polls, the election is widely viewed as one of the closest and most polarizing in recent U.S. history.
Meanwhile, in the tech sector, NVIDIA has once again claimed the title of the world's most valuable company by market capitalization, overtaking Apple. On Tuesday, NVIDIA's stock rose by 2.9% to $139.93, valuing the company at $3.43 trillion. This exceeds both Apple's market cap of $3.38 trillion and Microsoft's $3.06 trillion. NVIDIA had briefly claimed the top spot earlier in the year before Apple regained the lead. NVIDIA's inclusion in the Dow Jones Industrial Average, replacing Intel, further underscores its sustained ascendancy.
Market analysts are closely watching the election results, which could significantly impact U.S. fiscal and economic policies. A decisive win by either party in Congress could lead to substantial shifts in government spending and taxation. The outcome will likely influence economic policy directions, including immigration, taxation, and international trade.
Investors are also attuned to the Federal Reserve's monetary policy meeting scheduled this week. The Fed is expected to announce its interest rate decision on Thursday, potentially maintaining pressure on market liquidity and interest rates. The forthcoming policy commentary from Fed Chair Jerome Powell will be scrutinized for insights into the central bank's future actions.
The robust market momentum and the cloud of political uncertainty are contributing to heightened market volatility. However, historically, U.S. equity markets have generally performed well in election years. Since 1960, the S&P 500 index has seen an upward trend in most election years, with few exceptions during economic downturns like the 2000 tech bubble and the 2008 financial crisis.
As the election unfolds and with key policy decisions on the horizon, the market will likely experience both opportunities and risks. The resilience of the stock market, the strength of fiscal policies, and potential new leadership dynamics will shape the economic landscape going forward.