Stocks jump on Election Day stimulus hopes

Stocks staged a broad spirited rally on Election Day Tuesday. Investors bet that a decisive win would lead to a swift deal for a big fiscal stimulus package, and Democratic nominee Joe Biden’s lead over President Donald Trump in the polls raised those expectations.

The Dow surged more than 550 points, rising 2%. The S&P 500 and Nasdaq gained more than 1-and-three-quarters percent.

DataTrek Research co-founder Nick Colas:

“The markets are relieved Election Day is finally here. We’re going to have some political outcomes in very short order, and then we can move on with thinking about the stimulus and other issues that are very important to the U.S. economy and the stock market.”

Caterpillar, Honeywell and other industrials, which could benefit from Biden’s infrastructure spending promises, were among the biggest gainers Tuesday.

More spending on infrastructure could also boost inflation, which would benefit banks. Financial shares like Citigroup, Bank of America, and JP Morgan Chase powered higher.

But investors took profit on PayPal’s high-flying shares after the payment processor’s quarterly profit more than doubled.