Traders work on the floor of the New York Stock Exchange (NYSE) on October 27, 2022 in New York City. Stocks continued their upside gains on Thursday with the Dow Jones up nearly 400 points on a new GDP report that beat expectations.
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Equity futures were essentially flat – after recent market gains – due to the midterm elections dragged on with oversight of the United States House of Representatives and Senate still pending.
S&P 500 futures were down 0.1%, while Dow futures fell 50 points. Nasdaq 100 futures traded slightly higher.
Stocks have posted three straight days of gains so may have been due for a pause. The Dow Jones climbed 333 points on Tuesday for its third consecutive session of gains of more than 1%. The rebound in stocks may in part be due to the election, where Wall Street expected Republicans to gain ground and create a stalemate in Washington, D.C.
But control of the congressional chambers was not clear overnight until now.
Mike Wilson, Morgan Stanley’s chief U.S. equity strategist, said on CNBC “Closing bell“that if it ends up being a divided government, that could help ease concerns about inflation and rising interest rates in the future.
“It looks like the House will go with the Republicans,” Wilson said. “It means a stalemate. Probably, less budgetary expenditure will be carried out.”
The recent market rally comes at the start of a strong seasonal period. Historically, stocks tend to rise after midterm elections and the political clarity they bring, and the last two months of the year are seen as a bullish period for investors.
One of the stocks that weighed on futures was Disney, which fell more than 6% in extended trading after the entertainment giant missed estimates on its top and bottom earnings. fourth fiscal quarter.