By Liz Moyer
Investing.com -- The end of a contentious U.S. election season lifted stocks on Monday, though volatility is certain to weigh on markets until a clear outcome is known.
President Donald Trump and his opponent, former Vice President Joe Biden, criss-crossed key American swing states on the last day before the 2020 election. Polls open on Tuesday, but already nearly 100 million voters have cast early ballots.
A winner may not be declared for several days, owing to mail-in vote counting. And that declaration might be contested in court, something Trump has hinted at during this weekend’s rallies.
Still, the Dow Jones Industrial Average notched double-digit highs on Monday even though tech stocks felt pressure.
Here are three things that could affect markets on Tuesday:
1. Stocks anticipate a Blue Wave
Polls have Biden leading Trump by more or less than 10 points going into election day. Quinnipiac’s national poll put Biden at 50% and Trump at 39%. Polls can be very wrong, however. And national voting doesn’t count as much as the tally in the all-important swing states of Michigan, Wisconsin and Pennsylvania, where the electoral college margin could be decided.
Stocks have largely priced in a Biden victory, with the Senate switching to Democrat control -- a so-called Blue Wave. A Biden presidency is likely to have more stimulus and greater regulation, particularly as concerns the environment, but also spending on infrastructure and clean energy. A Trump second term would likely see less stimulus but some infrastructure spending.
2. For restaurant operators, election could mean higher wages
Restaurant stocks could come into focus with a Biden win. The candidate has advocated for a national minimum wage of $15 an hour, something that has already been adopted in several big cities.
That puts pressure on margins for chains like The Cheesecake Factory (NASDAQ:CAKE), The Wendy’s Co (NASDAQ:WEN) and Chipotle Mexican Grill Inc (NYSE:CMG) if menu prices aren’t raised. That said, stimulus and a return to better economic times should help restaurants including McDonald’s Corporation (NYSE:MCD)and Restaurant Brands International Inc (NYSE:QSR) as pandemic-weary consumers decide to call it quits on home cooking.
3. Used car dealers racking up pandemic-boosted sales
Autos are big on shoppers’ lists this fall. That trend has already boosted shares of giant second-hand auto retailers such as AutoNation Inc (NYSE:AN), CarMax Inc (NYSE:KMX) and recently debuted Carvana Co (NYSE:CVNA), and new stimulus from Washington could support continued buying.
The pandemic-related shut downs encouraged many to buy suburban homes and purchase cars to get around in a socially distanced way. Edmunds.com found that as of June, used car sales were up more than 22% from a year earlier.