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Edison Research called one of the races for Democrat Raphael Warnock, unseating incumbent Kelly Loeffler, while Democratic challenger Jon Ossoff held a slim lead over Republican David Perdue in the other with 98% of votes counted.
A Democrat-controlled Senate would give more scope for President-elect Joe Biden to act on his reform plans including new COVID-19 stimulus, but it could also mean higher corporate taxes and tighter regulations on the technology mega-caps – policies not typically favored by Wall Street.
“A ‘blue wave’ might not be a bad outcome for markets as decisive fiscal action will help to accelerate economic recovery,” said Vasu Menon, investment strategy executive director OCBC Bank, Singapore.
“This will be broadly bullish for risk assets, particularly equities, credit, commodities, and emerging market securities.”
By 2:06 a.m. ET, Dow e-minis were up 89 points, or 0.29%. Constituents of the blue-chip Dow are generally expected to benefit from a pickup in economic activity.
S&P 500 e-minis were down 5.25 points, or 0.14%, and Nasdaq 100 e-minis were down 147 points, or 1.15%.
Hopes of a vaccine-powered economic recovery in 2021 had powered Wall Street’s main indexes to record highs in late-December, but sentiment has recently been dented by the discovery of a more contagious variant of the coronavirus and the latest restrictions.
Analysts also expect the market to consolidate December’s gains in January as asset managers look to rebalance their portfolios that had been heavily tilted toward equities.
