(CercleFinance.com) – The New York Stock Exchange gained some ground on Tuesday pending the results of the midterm elections in the United States, supported for the time being by a decline in bond yields.
At the end of the morning, the Dow Jones advanced 1% to 33,149.7 points, while the Nasdaq Composite rose 0.6% to 10,624.3 points.
Investors are reluctant to take too strong positions and the early morning proved relatively flat before the results of the mid-term elections, scheduled for the evening.
According to the latest polls, the ballot should lead to a partisan division of Congress, with the Republicans recovering the majority in the House of Representatives and the Democrats retaining their advantage in the Senate after two years of presidency of Joe Biden.
This political blockage could however be well apprehended by the markets, according to the strategists.
If the two parties share control of Congress, then it seems unlikely that parliamentarians will pass significant legislation by the next presidential election in 2024.
This situation thus seems to eliminate the risk of a major change of course, such as that of tax increases, a scenario that is still very much feared on Wall Street.
A situation of cohabitation, however, could mean a resurgence of the eternal battles surrounding the raising of the debt ceiling or the renewal of the federal budget.
Whatever happens, the Federal Reserve should continue to tighten its monetary policy after the midterm elections, while it is monopolized by its fight against inflation.
On the bond compartment, the yield on ten-year government bonds fell well below 4.20%, to 4.15%, after its rise in recent days, which was due to expectations of further rate hikes. from the Fed.
On the foreign exchange market, the start of the day was characterized by the continued rise of the euro, which rose well above the parity threshold against the dollar, around 1.0066.
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