Stock markets rallied Monday as the prospects for Hillary Clinton’s presidential candidacy improved, with traders reacting to the weekend’s news that the FBI hadn’t found anything new in a reopened investigation into the Democrat’s emails and the latest polls indicating her support holding up.
The Dow Jones Industrial Average rose sharply at the start of trading and was up nearly 2 percent by early afternoon, with strength in all categories. The S&P 500 rose more than 40 points, or more than 2 percent.
Tina Fordham, the chief global political analyst at Citi, called the day’s trading a “relief rally” in an interview on Bloomberg. The market surge came in the first trading after Sunday’s announcement from FBI Director James Comey stating that nothing had been found to change the conclusions of the agency’s earlier investigations into Clinton’s private server that she used as secretary of state. In contrast, Fordham noted, stocks sold off Oct. 28, when Comey informed Congress that the investigation had been reopened.
Nevertheless, not all analysts interpreted Monday’s stock rally as implicit investor support for a Clinton presidency.
“Chances are it is more of a rally on more certainty of a divided government,” said Karin Kimbrough, head of Macro and Economic Policy at Bank of America Merrill Lynch, speaking on CNBC.
The latest polling indicates that control of the Senate could go either way, but that the House is very likely to remain in Republican hands.
Some analysts interpret divided government as a positive potential outcome, as it would portend higher odds for some of Clinton’s more mainstream-friendly platform planks, such as greater infrastructure spending, and lower chances that she would be able to work with liberal Democrats to push through big tax increases or other policies viewed as damaging to business.
