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Stocks Move Mostly Higher Amid Focus On Elections - U.S. Commentary


Stocks fluctuated over the course of the trading session on Tuesday but largely maintained a positive bias on the day. The major averages all moved to the upside following the mixed performance seen in the previous session.

Going into the close, the Dow and the S&P 500 reached new highs for the session. The Dow advanced 173.31 points or 0.7 percent to 25,635.01, the Nasdaq climbed 47.11 points or 0.6 percent to 7,375.96 and the S&P 500 rose 17.14 points or 0.6 percent to 2,755.45.

The strength on Wall Street came as stocks continued to recover from the sell-off seen in October, which was one of the worst months for the markets in years.

However, traders seemed reluctant to make more significant moves amid uncertainty about the outcome of today's highly anticipated midterm elections.

The elections will decide control of both the House and the Senate and could have a major impact on President Donald Trump's ability to enact his pro-business agenda.

Democrats are seen with an easier path to retaking the House than the Senate but could still be a significant thorn in Trump's side with control of just the lower chamber.

Traders also continued to look ahead to the Federal Reserve's monetary policy announcement, with the Fed due to announce is latest decision on Thursday.

The Fed is widely expected to leave interest rates unchanged, but traders will keep a close eye on the accompanying statement for clues about an expected rate hike in December.

Sector News

Most of the major sectors ended the day showing only modest moves, although considerable strength was visible among chemical stocks. Reflecting the strength in the chemical sector, the S&P Chemical Sector Index climbed by 1.5 percent.

Semiconductor stocks also showed a notable move to the upside, resulting in a 1.1 percent advance by the Philadelphia Semiconductor Index. The index rebounded after pulling back over the two previous sessions.

Within the semiconductor sector, Advanced Micro Devices (AMD) posted a strong gain after announcing its EPYC processors are now available on Amazon Web Services.

On the other hand, gold stocks came under pressure over the course of the session, dragging the NYSE Arca Gold Bugs Index down by 1.3 percent.

The weakness among gold stocks came amid a decrease by the price of the precious metal, with gold for December delivery falling $6 to $1,226.30 an ounce.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Tuesday. Japan's Nikkei 225 Index jumped by 1.1 percent, while Hong Kong's Hang Seng Index advanced by 0.7 percent.

Meanwhile, the major European markets moved to the downside on the day. While the German DAX Index edged down by 0.1 percent, the French CAC 40 Index fell by 0.5 percent and the U.K.'s FTSE 100 Index slid by 0.9 percent.

In the bond market, treasuries moved modestly lower over the course of the session after initially showing a lack of direction. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.3 basis points to 3.214 percent.

Looking Ahead

Trading on Wednesday is likely to be impacted by reaction to the outcome of the midterm elections and speculation regarding the impact on fiscal policy.

On the earnings front, Etsy (ETSY), GoDaddy (GDDY), Papa John's (PZZA), Wendy's (WEN) and Zillow (ZG) are among the companies releasing their quarterly results after the close of today's trading.

21st Century Fox (FOX), Dean Foods (DF), Groupon (GRPN), and Office Depot (ODP) are also among the companies due to report their results before the start of trading on Wednesday.

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