Big Tech stocks rally, as tech now drives S&P 500 more than on Election Day 2016
Big Tech stocks rallied Tuesday as Americans cast their vote for the next U.S. president, fueling the S&P 500’s sharp gain.
The S&P 500 closed 1.2% higher, with Tesla Inc. jumping 3.5%, Nvidia Corp. climbing 2.8%, Facebook parent Meta Platforms Inc. rising 2.1% and Amazon.com Inc. advancing 1.9%.
“The market setup going into Election Day 2024” is one in which technology drives the S&P 500 much more than in 2016 and 2020, said Nicholas Colas, co-founder of DataTrek Research, in an emailed note. “We continue to be bullish on U.S. large caps and believe that the most likely path for stocks through year-end is higher regardless of which candidate wins the presidential election.”
The U.S. stock market has a much higher valuation compared to Election Day in 2016 based on where the S&P 500 is trading relative to its earnings over the next 12 months, according to Colas. But the S&P 500’s price-to-earnings ratio is now similar to Election Day in 2020.