Dow to add to record climb as Biden’s election win confirmed after Capitol chaos

Dow to add to record climb as Biden’s election win confirmed after Capitol chaos

U.S. stock index futures pointed higher on Thursday after Congress confirmed the election of Joe Biden,  and President Donald Trump for the first time promised an orderly transition, and after protesters broke into the Capitol building disrupting proceedings on Wednesday afternoon.

The protests in Washington, which lead to the deaths of four people, including a woman shot by Capitol Police, marked one of the darker days in American democracy and yielded swift responses from world and business leaders, who condemned the overrun of the Capitol.

How are stock benchmarks performing?

On Wednesday, the Dow and small-capitalization Russell 2000 ended at record highs but off their best levels of the day as equity markets pared gains somewhat amid the chaos in Washington.

  • The Dow

    closed up 437.80 points, or 1.4%, to end at a record 30,829.40

  • The small-cap Russell 2000

    gained 4% to end at a record 2,057.92.

  • The S&P 500

    gained 21.28 points, 0.6%, to close at 3,748.14.

  • The Nasdaq Composite Index

    finished lower by 78.17 points, or 0.6%, at 12,740.79.

What’s driving the market?

Equities were heading modestly higher early Thursday as investors looked past the violence that played out in Washington on Wednesday during the usually ceremonial process of confirming a presidential election victory.

President Trump’s Twitter account was locked by Twitter, so he tweeted a message via his social-media director Dan Scavino, suggesting that he acknowledges his election defeat and pledges an orderly transition of power. “Even though I totally disagree with the outcome of the election, and the facts bear me out, nevertheless there will be an orderly transition on January 20th.”

The positive tone to trading in stock index futures early in the day suggests that investors are expressing “relief from yesterday’s political theatrical event,” Peter Cardillo, chief market strategist at Spartan Capital Securities, said in a Thursday research note.  

Read: Why the stock market rallied even as a violent mob stormed the Capitol

“There should be no mystery as to why the markets didn’t care about what happened in the [Capitol] yesterday, however disturbing, disgraceful, and embarrassing it was. It’s because it has no bearing on the direction of the economy, earnings and interest rates. It’s that simple,” wrote Peter Boockvar, chief investment officer at Bleakley Advisory Group.

Prominent business leaders, however, voiced concerns that the rioting on the Capitol undercut the integrity of U.S. democracy. “This is not who we are as a people or a country,” wrote JPMorgan Chase CEO Jamie Dimon in a statement. “We are better than this. Our elected leaders have a responsibility to call for an end to the violence, accept the results, and, as our democracy has for hundreds of years, support the peaceful transition of power,” he said, among many voices denouncing the violence.

The demonstrations, led by rioters wearing pro-Trump attire, came as some lawmakers planned to submit objections to the typically ceremonial certification of the November election, alleging voter fraud in some states. However, both the House and the Senate ultimately rejected challenges to results in Arizona and Pennsylvania, and no senators signed on to challenges in Georgia and other states.

The events of Wednesday nearly overshadowed a Senate runoff election victory by Democrat Jon Ossoff in Georgia, which cemented Democratic control of Congress after Democrat Raphael Warnock also won his Georgia Senate race.

The political wins raise the prospect of additional coronavirus fiscal relief measures and other legislation that could boost the U.S. economy after Biden is sworn in on Jan. 20.

Meanwhile, market participants await the U.S. weekly report on jobless claims as well as a reading of international trade in goods and services, both due at 8:30 a.m. Eastern.

A nonmanufacturing report, or services, from the Institute for Supply Management is due at 10 a.m.

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