A rally in US stocks, in a strong case of buying the rumour and selling the fact, has ended after Democrat Joe Biden appeared on course to clinch the presidency.
The tech-heavy Nasdaq Composite, which gained almost 7 per cent in the two previous sessions, dropped 1.3 per cent. The S&P 500 fell 0.6 per cent.
Investors and strategists had ascribed the rally earlier in the week to markets betting on a Biden win but a Republican-controlled Senate, which is viewed as less disruptive for corporate taxation and regulation than a Democrat sweep would have been.
Brian Gardner, chief Washington policy strategist at Stifel, warned investors against complacency, however. He wrote in a research note:
We think a Biden administration could have some latitude from Republicans on antitrust policy as both parties have become populist to varying degrees.
We expect M&A deals will receive more scrutiny than before and anti-competitive behavior is going to get a closer look.