US stocks edge higher as investors brace for midterm election results

Virginia voters
Voters in Midlothian, Va., hold their ballots as they vote in the Virginia gubernatorial election on November 2, 2021. Midlothian is located in Chesterfield County, a key Richmond suburb that supported Republican Glenn Youngkin over Terry McAuliffe.

  • US stocks moved higher Tuesday as polls opened for the 2022 midterm elections.  
  • Analysts say a Republican victory would cement expectations of no large policy shifts, boosting stocks. 
  • Morgan Stanley’s Mike Wilson said the S&P 500 could surge this week in a decisive Republican win. 

US stocks climbed Tuesday as voting in the 2022 midterm elections kicked off, with traders bracing for election results that could bring political gridlock should Republicans gain seats in Congress. 

Analysts say gridlock could bode well for investors, as a Republican victory would make major policy shifts less likely. That would give more predictability to markets, and the S&P 500 could climb as high as 4,150 this week if the results favor Republican candidates. 

“[T]he Republicans have talked about freezing spending via the debt ceiling much like they did in 2011 (the Budget Control Act),” Morgan Stanley’s Mike Wilson wrote in a Monday note to clients. “This would be a sharp reversal from the past few years when budget deficits reached levels not seen since WWII. In our view, a clean sweep by the Republicans on Tuesday could greatly raise the odds of such an outcome.”  

Here’s where US indexes stood as the market opened 9:30 a.m. on Tuesday: 

Here’s what else is happening:

In commodities, bonds, and crypto: 

  • Oil prices slipped, with West Texas Intermediate down 0.29% to $91.52 a barrel. Brent crude, the international benchmark, inched lower 0.04% to $97.88 a barrel.
  • Gold edged lower 0.15% to 1,678.40 per ounce. The 10-year yield ticked lower 2.8 basis points to 4.186%.
  • Bitcoin dropped 6.22% to $19,534.01.
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