DJIA Posts Super Gains
The Dow Jones Industrial Average (DJIA) jumped by 371 points, or about two percent, and closed at 18,259.60 on Monday.
The DJIA crossed the key 18,000 level as the Federal Bureau of Investigation (FBI) cleared the Democratic presidential nominee Hillary Clinton, in relation to her e-mails.
The S&P 500 also broke its nine-day losing streak and gained over two percent, to close at 2131.52. The market had taken a hit earlier, due to polls that showed Republican candidate Donald Trump narrowing the gap with Clinton, which led to more uncertainty about the election and its aftermath.
The NASDAQ also gained over two percent, or 119.80 points, to close at 5166.17.
The stocks rallied as the FBI said there is no case against Clinton. This boosts expectations that the Democratic nominee shall emerge the winner in the presidential election. Trump has been associated with unpredictability and volatility, and the markets are not prepared for the unknowns that may come with a Trump presidency. The DJIA had been hit hard earlier on the possibility of a Trump win.
Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk, in a recent interview on CNBC, stated that Trump’s character does not reflect well on the United States. Musk believes, however, that the outcome of election will not have much impact on Tesla’s business.
Trump is expected to raise geopolitical tensions through his trade policy, and has been speaking against countries like Mexico and China. Trump has made big promises to bring back jobs to the U.S. and he is not in favor of companies building their products in other countries.
Apple Inc. (NASDAQ:AAPL) CEO Tim Cook has been trying hard to boost sales and strengthen his company’s presence in China, which is the second-largest market for the company. AAPL stock may come under pressure, as relations with China are expected to get worse under a Trump presidency.
However, Clinton’s tax policies on repatriation of offshore cash are likely to put some pressure on technology stocks. Companies like Apple, Microsoft Corporation (NASDAQ:MSFT), Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL), and Oracle Corporation (NYSE:ORCL) have huge amounts of dollars overseas. Trump has proposed lower corporate taxes, and his idea of a repatriation holiday had been received well.
Still, most of the technology community appears to be in favor of Clinton, as Trump’s policies on trade and immigration are likely to be counterproductive.
Polling stations have already opened, as election day is finally here. Although recent polls predict a victory for Clinton, nobody can be sure until the results are declared. Until a winner is announced, the markets may take a breather, with the Dow Jones Industrial Average likely to trade in a range.