Changed Wall Street... "If There Is No Blue Wave, the Stock Market May Actually Decline"

Relief Spreads in New York Stock Market Amid Biden's Strong Lead... Expectations for Stock Rally and Dollar Weakness
"Concerns Over Tax Hike Disappear," Analysts Say
Apple and Amazon Surge, Nasdaq Rises 2.5%

[Image source=AP Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The New York stock market showed a significant upward trend. While the general interpretation is that the strength of major tech stocks such as Apple and Amazon stood out, there is also a persuasive view that the possibility of a 'Blue Wave,' where the US Democratic Party controls the presidency as well as both the Senate and the House, influenced the market.

The most notable index was the Nasdaq. On the 12th (local time), the Nasdaq index closed at 11,876.26, soaring 296.32 points (2.56%). This was the largest increase in about a month since September 9. The Dow Jones Industrial Average and the S&P 500 rose by 0.88% and 1.64%, respectively.

The stock price rise on this day was led by Apple and Amazon. Apple surged 6.4% a day before its special event, where it is expected to unveil the first iPhone equipped with 5G functionality. Apple’s stock generally rises ahead of new product launches, but this time the increase was particularly notable.

Amazon, which holds its annual discount event 'Prime Day' on the 13th and 14th, also rose 4.75%. This Prime Day is regarded as a signal marking the start of the year-end shopping season ahead of Thanksgiving and Christmas shopping seasons. Since consumer purchasing behavior has largely shifted online due to COVID-19, investors are paying close attention to Amazon’s performance.

Experts interpret this rise not only as good news for these two mega-cap stocks but also as a pre-reflection of the US presidential election results. Recent polls show Democratic presidential candidate Joe Biden widening the gap with President Donald Trump in swing states, which has acted as a positive factor for the stock market.

This evaluation overturns the previous perception that 'a Democratic administration would be negative for Wall Street.' On this day, investment bank UBS assessed that the stock market’s reaction to the 'Blue Wave' has completely reversed over the past two weeks. While many believed that the market correction since September reflected the possibility of Biden’s election with his promise of tax increases, it is now analyzed that the election of the Democratic candidate is being recognized as a green light for stock market gains.

According to Business Insider, UBS introduced that the forecast that stock prices would fall due to higher tax rates and reduced corporate profits if the Democrats win the election has disappeared. UBS even predicted that investors should not be surprised if, in the event the Blue Wave does not materialize, disappointed investors sell off stocks. CNBC also quoted Quincy Crosby, Chief Investment Strategist at Prudential Financial, saying, "The market seems to be starting to understand that the Blue Wave does not mean a radical progressive scenario."

President Trump and candidate Biden both visited swing states on the day exactly three weeks before the election to campaign. President Trump, who tested negative for COVID-19, visited a rally site in Florida and, seemingly to demonstrate his health, appealed for support without wearing a mask.

This content was produced with the assistance of AI translation services.