(WAND) – Stocks continued their big post-election rally as futures rose in overnight trading on Sunday. The gains came as Democrat Joe Biden defeated incumbent Donald Trump in the U.S. presidential race to become president elect, according to NBC projections.
Futures on the Dow Jones Industrial Average rose 268 points, meaning an opening gain of about 130 points at Monday’s open. S&P 500 futures climbed 0.5% and Nasdaq 100 futures rose 0.6%.
The former vice president won after his projected win in Pennsylvania as well as Nevada, according to NBC News projections on Saturday. The call came four days after Election Day and as close counts in several battleground states ensued.
Wall Street hoped the call would reduce the odds of a drawn-out election fight, even as Trump refused to concede. Many traders had put on bets for market volatility in November and were unwinding those positions, helping to fuel a rally.
In the meantime, the odds of a “blue wave” that sweeps Democrats into the majority of both the Senate and the House have waned, meaning drastic policy changes such as tax hikes are less likely.
“A Biden presidency with a Republican Senate would be unlikely to see any increase in taxes, which was arguably the biggest fear investors had about a Biden presidency,” Brian Levitt, global market strategist at Invesco, said in a note on Sunday. “And a Biden presidency could mean a return to a more traditional, predictable approach to trade policy, which would likely result in less volatile markets.”
Democrats are projected to keep their House majority, although Wall Street was watching closely as Senate control is still in limbo. Both of Georgia’s Senate races are likely going to runoffs slated for early January.
Wall Street had rallied in the past week in anticipation for such a gridlocked government and was set to build on that rally as it gained clarity in the presidential race. All three major averages just notched their best weekly performance since April. The S&P 500 and Nasdaq jumped 7.3% and 9%, respectively, last week, while the Dow rose 6.9%. The S&P 500 also posted its biggest election week gain since 1932.
Tech was the biggest winner last week among the 11 S&P 500 sectors, surging 9.7%. Investors piled into the high-growth group as the prospect of higher taxes and tighter regulations under a Democratic sweep decreased.