Stock market today: Dow rides midterm election fever to close higher

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Stock market today: Dow rides midterm election fever to close higher
Credit: © Reuters.

By Yasin Ebrahim

Investing.com -- The Dow continued its strong start to the week Tuesday, on bets political gridlock looms in the U.S., with Republicans widely expected to come out on top in the battle for control of Congress as the U.S. midterm election gets underway. 

The Dow Jones Industrial Average gained 1%, or 333 points, the Nasdaq was up 0.49%, and the S&P 500 rose 0.56%,

With Republicans expected to take back control of the House, many are betting a divided Congress as the likely outcome “regardless of the Senate outcome,” Goldman Sachs says, as President Joe Biden could veto legislation, stifling the GOP’s agenda.

A dividend Congress, or political gridlock in Washington, has historically proven a boon for stocks.

But a surprise victory for Democrats in both chambers, however, will likely “weigh on equities as market participants might expect additional corporate tax increases,“ Goldman Sachs added.

As well as bets on a political gridlock in Washington, a jump in material stocks underpinned the broader market climb amid a rally in chemicals company Dupont and fertilizer company Mosaic.  

Dupont De Nemours Inc (NYSE: DD ) reported quarterly results that topped Wall Street estimates, sending its shares more than 7% higher.

Mosaic (NYSE: MOS ) shrugged off third-quarter results that fell short of estimates to rise more than 5% on the day.

Take-Two (NASDAQ: TTWO ), meanwhile, fell more than 13% after the video game maker cut its outlook on net bookings, stoking worries about demand as slowing global economic growth stifles consumer spending.

LYFT (NASDAQ: LYFT ) was also deep in the red, down nearly 23%, after the rideshare company reported mixed fiscal second-quarter results as earnings beat but revenue fell short of estimates.

Treasury yields, meanwhile, continue to retreat with the 10-year yield hovering around 4% with just days to go until fresh inflation data will likely resume focus on the Federal Reserve’s plan to hike rates.

Big tech traded mixed as Meta Platforms (NASDAQ: META ) gave up some of its gains from a day earlier, while Apple (NASDAQ: AAPL ) and Google (NASDAQ: GOOGL ) ended the day marginally higher. 

Tesla (NASDAQ: TSLA ) fell nearly 3% as the electric vehicle maker is reportedly recalling more than 40,000 of its EVs in the U.S. that may experience a loss of power steering functionality. The EV maker, however, has released a firmware update to address the issue, The  Wall Street reported Tuesday.

In other news, cryptocurrency-related stocks fell sharply as bitcoin slumped after crypto exchanges Binance and FTX inked a merger agreement just as the latter was facing "a significant liquidity crunch". The concerns had triggered a slump in FTX's FTT token , and dragged the broader crypto market down for the ride.

MicroStrategy Incorporated (NASDAQ: MSTR ) fell 21%, Coinbase Global (NASDAQ: COIN ) fell 11%, and Riot Blockchain Inc (NASDAQ: RIOT ) fell 7%.

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