S&P 500 e-mini futures were up 0.1 per cent, implying traders expect the U.S. stock market to open with a slight gain on Wednesday. But if the possibilities for compromise and big agenda items seem limited, Wall Street is fine with that because it means politics is that much less likely to crowd out the performance of the strong USA economy. Benchmark U.S. crude picked up 0.5 percent to $62.51 a barrel in NY, and Brent crude, the standard for worldwide oil prices, rose 1 percent to $72.87 a barrel in London.
Following a steep selloff in October, the S&P 500 remains down more than 5 per cent from its record high, with many investors anxious the market could fall further as inflation gathers steam and the Federal Reserve raises interest rates.
The US markets swooned in October, knocking the S&P 500 down almost 7 per cent, as investors anxious about rising interest rates and the US-China trade dispute.
October is historically a rough month for stocks, though markets usually rise after midterm elections regardless of how the political landscape may change because Wall Street is glad to have more certainty.
After an initial muted market reaction globally, futures for the three major Wall Street indexes powered higher along with European stocks, while the dollar dropped on lowered chances of further US fiscal stimulus. Quincy Krosby, chief market strategist at Prudential Financial, said it will be worth watching to see if investors are willing to buy those stocks again or if they continue to prefer slower-growing, more "defensive" companies like utilities and household goods makers.
But even as technology and healthcare stocks soared, investors questioned whether the sectors could now be more at risk of additional regulatory scrutiny. Amazon jumped 4.8 percent to $1,721 while Microsoft rose 3.7 percent to $111.72.
The dollar, meanwhile, gave up some recent gains, trading down 0.3 percent at 113.09 yen, while the euro advanced 0.5 percent to $1.1485. Industrial companies made smaller gains while banks were little changed.
UnitedHealth, the largest US health insurer, gained 3.7 percent to $372.35 and Anthem added 3.9 percent to $282.48. Those gains were aided by strong results from another insurer, Humana.
Molina, a provider of Medicaid-related services, surged 7.1 percent to $133.07 and Medicare and Medicaid coverage provider WellCare picked up 5.6 percent to $270.88. Marijuana growers were on track for gains Wednesday morning after voters in MI passed a ballot measure to legalize marijuana, while Missouri became the 31st state to approve marijuana for medical use.
Shares in marijuana firms also climbed, boosted by measures that expanded legalisation in several states as well as the firing of Attorney General Jeff Sessions, who had taken a hard line against the drug.
Oil drillers Anadarko Petroleum and Noble Energy rallied after Colorado voters rejected a measure that could have sharply reduced oil and gas drilling, including the method known as fracking, by requiring new oil and gas wells to be farther from occupied buildings than allowed under current law.
Anadarko climbed 5.7 percent to $57.87 and Noble rose 5 percent to $28.37.
Oil prices continued to fall. USA crude lost 1.1 percent to $61.52, and Brent crude, the standard for worldwide oil prices, fell 0.8 percent to $71.53 a barrel in London.
It's not clear how the election's outcome will affect the Trump policy Wall Street might be most concerned about: his pursuit of an "America first" trade strategy that has drawn the USA and China, the world's two biggest economies, into a trade war. Trump has imposed taxes of up to 25 per cent on US$250 billion of Chinese imports, and Beijing has responded with tariffs on US$110 billion of American goods.
Elsewhere in Asia, Japan's benchmark Nikkei 225 fell 0.3 percent to finish at 22,086, while South Korea's Kospi slipped 0.5 percent to 2,079. But Hong Kong's Hang Seng edged 0.1 percent higher.
Potentially more important for the dollar this week, he said, will be the Federal Reserve's latest interest rate announcement on Thursday and its accompanying statement. Though rates are expected to be kept on hold, policymakers are set to signal a further increase next month.