US Stock Market Surges... Biden Victory Expectations Rise

Stock Market Rises Reflecting Biden's Victory... Dollar and U.S. Treasury Prices Stabilize
Possibility of Fluctuations Depending on Election Results
Major Chinese Banks May Restrict Foreign Exchange Operations

[Asia Economy New York=Correspondent Baek Jong-min] The US stock market, which plunged last week, rebounded as the presidential election approached. While this is seen as a reflection of expectations for the victory of Democratic presidential candidate Joe Biden, many are adopting a wait-and-see stance to observe the election results, so the possibility of increased volatility cannot be ruled out if unexpected situations arise.

On the 2nd (local time), the Dow Jones Industrial Average closed at 26,925.05, up 1.60% (423.45 points), the S&P 500 index rose 1.23% (40.28 points) to 3,310.24, and the Nasdaq index also ended the day at 10,957.61, up 0.42% (46.02 points).

The market rise on this day is largely seen as a reaction to the sharp drop last week and a reflection of Biden's chances of winning. Last week, the New York stock market fell the most since March, reflecting concerns over the spread of the novel coronavirus (COVID-19) and potential post-election turmoil.

In particular, expectations that the Democratic Party would also have an advantage in the Senate elections added strength. If the 'Blue Wave,' where the Democrats win the presidential, Senate, and House elections, materializes, there is anticipation of active economic stimulus measures. Energy policy beneficiary stocks were strong in line with Biden's 'Green New Deal' pledge. The Invesco Solar ETF, a 'Biden-themed stock,' rose as much as 3.2%.

Additionally, favorable manufacturing indicators from the US and China supported the stock market. The Institute for Supply Management (ISM) announced that the US manufacturing Purchasing Managers' Index (PMI) for October rose from 55.4 in the previous month to 59.3. This is the highest level in over two years since September 2018. It also significantly exceeded the expert forecast of 56.0 compiled by The Wall Street Journal (WSJ).

However, concerns about uncertainty after the election still remain. The Bank of China and the Bank of Communications issued notices the day before, stating that due to the risk of increased market volatility during the US presidential election, they may restrict individual foreign exchange-related transactions. Matt Maily, Chief Market Strategist at Miller Tabak, said, "There is concern that if another major uncertainty such as an unclear election result arises, another decline could occur."

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