Day Traders Diary
The major averages rose for a third day as investors awaited the results of the U.S. midterm elections, which could affect future levels of government spending and regulation. The Dow Jones Industrial Average gained 334 points, or 1.02%, to 33,161. The S&P 500 was up 0.5% to 3,828.16. The Nasdaq Composite advanced 0.49% to 10,616.
Market participants are expecting Republicans to take back the House of Representatives and possibly win the Senate as well when results start rolling in Tuesday night. Investors tend to like the notion of gridlock in Washington with a divided Congress and President because it will limit government spending, new taxes and regulations.
Overall, history shows markets tend to gain into year-end and up to 12 months following midterm elections as investors are relieved to get some clarity on future policy. One wild card would be if multiple races that could determine control of Congress are too close to call, an outcome that could weigh on markets Wednesday.
Stocks came off their highs Tuesday afternoon, with the Nasdaq down 0.9% at one point, amid a broader sell off in cryptocurrencies. Bitcoin dropped nearly 13% Tuesday after the two biggest crypto exchanges in the world, Binance and FTX, came to a merger agreement to fix the latest "liquidity crunch." Bitcoin hit a low of 17,300.80, or its lowest level since November 2020.
SolarEdge Technologies was the leading outperformer in the broader market index, up more than 18% after reporting record revenue in its most recent quarter. Elsewhere, shares of Kohl's jumped more than 10% after the department store chain announced the departure of its CEO next month.
Crypto sell-off steals some steam from stock market rally. Stocks came off their highs as crypto fell hard after the two largest crypto exchanges agreed to merge to fix their latest "liquidity crunch."
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