Financial markets have been moving on hopes — and then dashed hopes — for more fiscal stimulus out of Washington for months now, and investors expect a bigger stimulus package under a Democratic administration.
“I think [the market is up on] two things: some retracing from last week[‘s losses], but I also think there’s a sense that no matter who wins there will be some short-term money coming, whether it’s stimulus or infrastructure,” said JJ Kinahan, chief market strategist at TD Ameritrade.
The US economy has started on its long road to recovery, but economists and central bankers agree that more government spending will be needed to keep the improvements going.
Meanwhile, President Donald Trump said Tuesday morning on “Fox & Friends” he believed the market was up because investors were pricing in another term for him.
Trump has repeatedly said the market would sell off if Biden was elected, even though market participants have refuted this thesis because of the expected government spending to boost the recovery.