Stock Market Today: Wall Street Rebounds On Possible Biden Win, Hopes For New Round Of Stimulus Checks

U.S. stocks ended Election Day on a high note with a surge sparked by investor hopes that a clear winner would be declared in the presidential election and that a stimulus deal would be passed.

The Dow Jones Industrial Average on Tuesday gained 554.98 points, or 2.1%, to close at 27,480.03, after gaining as much as 715 points at its session high. The S&P 500 rose 58.92 points, or 1.8%, to close at 3,369.16, in its second-straight big gain. The Nasdaq composite climbed 202.96 points, or 1.9%, to end the session at 11,160.57.

Tuesday's close represented the second-best performance on a presidential Election Day.

Democrat Joe Biden’s lead over President Trump in many national polls has raised expectations for a quick outcome and a post-election stimulus package.

“It seems as though the polls have narrowed which makes it a little bit more difficult for Biden but the market reacting the way it is now tells me the market thinks we are going to get a resolution fairly quickly,” Randy Frederick, vice president of trading and derivatives at Charles Schwab in Austin, Texas, told Reuters.

“If for some reason we don’t have any kind of a clear picture, if there is an unwillingness to concede on the part of the loser and this ends up having to go to the courts, we are in for some choppy, volatile markets for a while.”

A victory for Biden, along with Democrats gaining a majority of the Senate, could speed up another stimulus package. Hopes for a new round of relief have been shut down and the Senate is not scheduled to return until Nov. 9, which slows the progress of a new stimulus bill.

House Democrats and the Trump administration seemed to have made progress on a deal close to $2 trillion, which would include $1,200 stimulus checks and an extension of enhanced federal unemployment benefits. However, Senate Republicans remain opposed to such big spending.

Wall Street's rebound comes just one week after the market's worst performance in seven months when the Dow fell by 940 points after soaring coronavirus infection rates sparked lockdowns in some parts of Europe.

There had been growing fears on Wall Street that there may not be a clear winner in the election.

Trump has questioned the integrity of the electoral system and argued that voting by mail is fraudulent. He has repeatedly claimed that the historic number of mail-in votes will lead to massive ballot fraud. Trump said the election must be decided by the end of Tuesday, even though it may take states days or in some cases weeks to certify results.