Markets React to Potential Republican Victory in U.S. Election

U.S. stock futures and the dollar surged as the possibility of a Republican victory in the presidential election gained traction. With the race remaining too close to call, investors speculated on potential market impacts, including tax reforms and fiscal policies, leading to reactions across various financial indicators.

Nov 6 (Reuters) - U.S. stock futures and the dollar surged on Tuesday as investors wagered on a possible Republican victory in the presidential election, even though the race remained too close to officially call. As of now, Donald Trump is making a stronger showing than in his failed 2020 bid, securing 211 Electoral College votes compared to Kamala Harris's 145, with a third of the votes counted.

The markets reacted with the S&P 500 e-mini futures rising by 1.2%, the 10-year U.S. Treasury yield hitting a four-month high of 4.47%, and the U.S. dollar index climbing 1.5%. Bitcoin reached a record high of $75,060, indicative of market confidence in a 'red sweep' of Congress. Analysts suggest that such a result could lead to substantial tax reforms and fiscal changes, driving favorable investment conditions in the U.S.

Economic experts are closely monitoring financial instruments, with U.S. Treasury yields rising sharply in anticipation of policy shifts under a potential Republican administration. This encompasses expectations of increased fiscal spending and deficits, different from what might be seen under Harris's leadership. The financial world awaits further clarity from the Federal Reserve and more detailed election outcomes to adjust their strategies accordingly.

(With inputs from agencies.)