Stock futures were in a holding pattern Tuesday evening as traders awaited results of the Georgia Senate runoff elections, which will determine control of Congress and shape policy decisions for the coming years.<\/p>\n
Contracts on each of the major indices were little changed as the overnight session kicked off. During the regular session, the three major indices pushed higher to shake off Monday\u2019s declines, as energy and tech stocks gained. U.S. crude oil prices jumped above $50 per barrel for the first time since February 2020 after Saudi Arabia unexpectedly agreed to cut oil output by one million barrels per day to support languishing energy prices during the pandemic.<\/p>\n
Political uncertainty has gripped U.S. equities over the past several sessions, with the Georgia Senate run-off elections a central event. Polls in Georgia close at 7 p.m. ET on Tuesday, though many political analysts have warned it may take some time to tabulate the votes amid this year\u2019s surge in mail-in and early ballots. A record more than 3 million individuals voted early or by mail for the Georgia run-off elections, according to the U.S. Elections Project. <\/p>\n
\u201cSimilar to the general elections in November, in-person ballots will likely be tabulated first with mail-in ballots taking somewhat longer to count in full,\u201d Nomura economist Lewis Alexander said in a note Tuesday. \u201cGiven the disproportionate use of voting by mail for Democrats, that means the early results could skew Republican (widely referred to as a \u2018red mirage\u2019).\u201d<\/p>\n
Strategists have largely taken hold of the notion that a Democratic sweep of both seats in Georgia would be a market negative event due to the implications for higher corporate taxes and bigger government spending. The S&P 500 could see a downdraft of as much as 10%, according to one prediction from Oppenheimer.<\/p>\n
\u201cThe lights … may be dimmed a little bit on the market run we\u2019ve been having depending on what the outcome is. I think from our perspective, if you do see Democrats win both of those seats with a 50-50, very slim majority in the Senate, we could see some action that could results in a tax increase really in late 2021 or 2022,\u201d Chris Meekins, healthcare policy analyst Raymond James, told Yahoo Finance. \u201cBut in the near-term, you\u2019re more likely to get fiscal stimulus, you\u2019re more likely to see some potential nominations get through that may be more progressive. So it\u2019s a bit of a mixed bag. I think it will take some time for the market to interpret what can get done versus what won\u2019t be able to get done.\u201d<\/p>\n
Others also suggested markets\u2019 fears over the outcome of the election may be overblown.<\/p>\n
\u201cEven if the Democrats win two seats, which would give them the Senate in a 50-50 tie, there are a couple of Democrats who are quite moderate \u2014 you\u2019ve got Joe Manchin of West Virginia, you\u2019ve got Jon Tester of Montana,\u201d Greg Valliere, AGF chief U.S. policy strategist, told Yahoo Finance on Tuesday. \u201cThose two moderate Democrats I think will not going along with everything the Democrats want if they control the Senate. So no matter how you slice it, I think you\u2019re looking at a pretty centrist environment for the financial market.\u201d<\/p>\n
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Here were the main moves in markets, as of 6:02 p.m. ET Tuesday:<\/p>\n