US stocks and Treasury yields rise as Biden and Trump battle for victory

US stocks and Treasury yields rise as Biden and Trump battle for victory

Investors say markets are anticipating Democratic win and post-election stimulus

US stocks rallied and the yield on long-term Treasuries hit the highest level since June as Americans headed to the polls on Tuesday, with investors placing bets on post-election economic stimulus.

Election day kicked off with Democratic challenger Joe Biden leading Republican incumbent Donald Trump in national polls, but with tight races expected in battleground states.

Markets have positioned in anticipation of a victory by Mr Biden and potentially a “blue wave” in which Democrats also take control of both the Senate and House of Representatives, investors and traders said.

“The equity market appears to be pricing in the increased odds of a Biden win and a blue wave,” said Hong Li, head of US equity quantitative strategy at Citigroup. “Timely and clear election results will remove one of the two major risks for the equity market and may bring a clearer picture of the potential stimulus package.”