Dow jumps 423 points in rebound from worst week since March

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  • US stocks rallied on Monday as encouraging economic data and election bets lifted indexes from their worst weekly slump since March.
  • Market volatility picked up as Election Day neared. Former Vice President Joe Biden has enjoyed a lead in the polls, but President Donald Trump has indicated he would contest a close election through legal battles in swing states.
  • A closely watched gauge of US manufacturing-industry growth climbed at its fastest rate in two years. The index gained to 59.3 in October from 55.4, beating economists’ estimates of 56.
  • Oil rebounded slightly from five-month lows, with West Texas Intermediate crude jumping as much as 3.6%, to $37.09 per barrel.
  • Watch major indexes update live here.

US stocks jumped on Monday as investors cheered better-than-expected economic data and braced for the US presidential election on Tuesday.

Energy, industrial, and materials stocks led the market’s upswing from its worst week since March. Tech stocks hobbled to a meager one-day gain as investors continued to shun disappointing earnings results from mega-cap names.

Cboe’s VIX index — Wall Street’s preferred gauge of market volatility — fluctuated at slightly elevated levels as investors finalized their Election Day strategies. The results, particularly in Senate races, could determine whether fiscal stimulus is enacted early next year.

While former Vice President Joe Biden has enjoyed a lead in the polls, President Donald Trump could pull off the same kind of surprise victory as he did four years ago. Any contested results and legal battles would almost surely fuel choppy price action and further volatility.

Here’s where US indexes stood at the close on Monday:

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“With one day to go until the presidential election, the stock market will undoubtedly take a wait and see attitude, with traders apprehensive about disputed election results,” said Marc Chaikin, the founder of the quantitative research firm Chaikin Analytics.

The first major economic-data release of the month supported arguments that the US recovery remains strong. The Institute for Supply Management’s gauge of manufacturing activity jumped to 59.3 in October from 55.4, its fastest rate of expansion since 2018. Readings above 50 indicate industry growth. Economists surveyed by Bloomberg had expected the gauge to reach 56.

“Manufacturing’s recovery is much more advanced than services, but we expect factory activity to face challenges from the slowing domestic recovery and weaker external demand without the crutch of generous fiscal support,” Oren Klachkin, the lead US economist at Oxford Economics, said in a note.

Read more: Morgan Stanley’s top cross-asset strategist says 3 assets are not pricing in a Democratic sweep — setting them up for big gains if that scenario unfolds

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