Stock futures rise slightly as Wall Street awaits midterm election results

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 following a new GDP report that beat expectations.

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Stock futures were slightly higher on Tuesday night as polls began to close in the U.S. midterm elections.

Nasdaq 100 futures rose 0.5%, while S&P 500 futures gained 0.2%. Dow futures were slightly higher.

Stocks are coming off three straight days of gains, with the Dow Jones climbing 333 points on Tuesday for its third straight session adding more than 1%. The rebound in stocks may be partly due to the election, where Wall Street expects Republicans to gain ground and create a stalemate in Washington, D.C.

Morgan Stanley’s chief U.S. equity strategist Mike Wilson said on “Closing Bell” that a divided government could help ease concerns about inflation and rising interest rates in the future.

“In order to gain further support for this rally, we believe rates need to come down. …Tonight’s election could be very important in that regard, as it looks like the House will go the way of the Republicans. That means a “Probably less budget spending will be done,” Wilson said, adding that it was unclear whether the markets had already forecast a big night for Republicans.

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 the futures was Disney, which fell more than 6% in extended trading after the entertainment giant missed estimates on higher and lower earnings for its fiscal fourth quarter.

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