Investing.com – Wall Street traded higher on Monday in a political relief rally on the back of fresh hopes that Hillary Clinton will win the U.S. presidential election this week boosted appetite for riskier assets.
At 11:03AM ET (16:03GMT), the Dow Jones surged 300 points, or 1.67%, the S&P 500 gained 39 points, or 1.88% while the tech-heavy Nasdaq Composite jumped 109 points, or 2.16%.
The move in the S&P 500 came after the principal benchmark index closed last Friday in the red for a ninth consecutive session, marking its longest losing streak since December 1980.
Risk-on sentiment was buoyed as the FBI announced on Sunday that it stood by a previous decision to not charge Democratic candidate Hillary Clinton over emails related to her private server.
The news lifted a cloud over Clinton's presidential campaign just two days before the U.S. election and possibly blunted momentum for rival Donald Trump.
Markets have tended to see Clinton as the status quo candidate.
Additionally, the risk-on attitude saw traders flee from safe haven assets such as the Japanese yen, gold or sovereign debt.
The Japanese currency was down 1.44% at 104.57 against the dollar at 11:05AM ET (16:05GMT) after surging to 104.63 in early trade. It had declined to 102.55 last week as polls showed a tightening U.S. presidential race.
In precious metals, gold prices lost 1.75% to $1,281.65 by 11:05AM ET (16:05GMT). Prices of the yellow metal rallied to a five-week high of $1,309.30 last Wednesday, as investors were rattled by signs the U.S. presidential election race was tightening.
Global government bond prices also retreated, with yields on the 10-year U.S. Treasury rising 1.92% to 1.817% by 11:06AM ET (16:06GMT), as risk appetite surged across the board.
In a further sign of positive investor sentiment, the VIX, known as the market’s fear gauge, tumbled 16.93% to 18.70 at 11:06AM ET (16:06GMT).
Meanwhile, the Mexican peso soared 2% against the dollar (USD/MXN), in a sign that investors now believe a victory for Clinton over her Republican rival Donald Trump in Tuesday’s election is more likely.
The Mexican currency, which has acted as a barometer of the markets' perception of a likely Donald Trump victory, has been sensitive to developments in the election amid fears that a victory for Trump could damage the country’s economy as he acts to raise obstacles against the southern neighbor.
With no major economic reports on in Monday’s session, the Conference Board’s employment trends index improved to 128.97 in October from the prior revised 128.29.
The Federal Reserve labor market conditions index showed improving activity after two straight months of deterioration.
Later in the session, the Fed will release consumer credit data for September.
On the company front, shares in Chipotle Mexican Grill (NYSE:CMG) jumped nearly 4% after a Reuters’ report late Friday indicated that the restaurant chain had signed an agreement to hold confidential discussions with billionaire investor William Ackman which could lead to changes without a proxy contest.
Berkshire Hathaway B shares (NYSE:BRKb) were up 2% despite the fact that profit slid 24% in the quarter and missed analyst expectations. Warren Buffet’s conglomerate also revealed that it had maintained its approximately 10% in Wells Fargo (NYSE:WFC) despite the recent scandal.
Meanwhile, crude was losing steam near mid-day trade stateside, paring earlier gains of more than 1% as investors piled into risk assets on the Clinton news.
Supporting prices of black gold, the secretary-general of the Organization of the Petroleum Exporting Countries (OPEC) Mohammed Barkindo said the group was committed to an output-cutting deal made in Algiers in September, as well as a reported 5.0 magnitude earthquake that struck Sunday night near Cushing, Oklahoma, home of the largest U.S. commercial oil storage hub.
U.S. crude futures gained 0.44% to $41.25 by 11:08AM ET (16:08GMT), while Brent oil traded down 0.22% to $45.48.