KEY POINTS

  • S&P futures up 1.4%, Nasdaq up 1%
  • Dow rose 1.6%, S&P 500 rose 1.23% on Monday
  • Asian stocks also up on Tuesday

U.S. stock futures surged ahead of the U.S. presidential election Tuesday, with Dow futures rising more than 450 points by 5.30 am ET. S&P 500 and Nasdaq 100 futures were also up about 1 percent.

Dow Jones Industrial Average (^DJI) rose 423 points, or 1.6%, on Monday, while the S&P 500 (^GSPC) climbed 1.23%. The Nasdaq Composite (^IXIC) was weighed down by tech stocks including Facebook, Apple and Adobe.

Asian stocks also registered growth on Tuesday ahead of the elections. Stocks in Hong Kong, South Korea and Australia jumped more than 1%, reported Bloomberg.

A clear election outcome on the horizon could be pulling the markets up. “As the election nears, investors who were selling on the rumor may now be buying on the news and finally, after almost a 10% decline in the last month, buying on the dip is back,” Jim Paulsen, chief investment strategist at Leuthold Group, told CNBC.

The Wall Street is recovering from a selloff in the last week of October when rising COVID-19 cases and worries about the progress of stimulus package talks dampened investor sentiments.

The Dow seems to be emerging from its worst month since March. S&P 500 and Nasdaq had fallen for two consecutive months.

Polls are favoring Democrat candidate Joe Biden, along with a blue wave prediction from the Wall Street and analysts from major banks including Goldman Sachs and JPMorgan.

Until Monday, nearly 94 million votes had already been cast, which is nearing the total votes cast in 2016 polls. Investors are also watching elections to the Senate, where a Democrat victory will  pave way for major policy shifts.

Apart from the elections, the coronavirus pandemic will continue to affect the markets as the number of cases in the U.S. keeps rising. European economies including France, Germany and the U.K. have put in fresh restrictions and lockdowns to battle a new wave of infections.

The Dow Jones Industrial Average has risen more than 30 percent since hitting a low on March 23 as officials around the United States imposed tough lockdown measures that shuttered most economic activity The Dow Jones Industrial Average has risen more than 30 percent since hitting a low on March 23 as officials around the United States imposed tough lockdown measures that shuttered most economic activity Photo: AFP / Johannes EISELE