S&P 500 gives up some gains, but trends higher as midterms get underway

By Yasin Ebrahim

Investing.com -- The S&P 500 gave up some gains Tuesday, but remained supported on bets that stocks will likely receive a boost should Republicans come out on top in the race for control of Congress as voting in the U.S. midterms gets underway.  

The S&P 500 rose 0.3%, the Dow Jones Industrial Average gained 0.7%, or 236 points, and the Nasdaq was up 0.13%

With Republicans expected to take back control of the House, many are betting a divided Congress as the likely outcome “regardless of the Senate outcome,” Goldman Sachs says, as President Joe Biden could veto legislation, stifling the GOP’s agenda.

A dividend Congress, or political gridlock in Washington, has historically proven a boon for stocks.

But a surprise victory for Democrats in both chambers, however, will likely “weigh on equities as market participants might expect additional corporate tax increases,“ Goldman Sachs added.

As well as bets on a political gridlock in Washington, a jump in material stocks underpinned the broader market climb amid a rally in chemicals company Dupont and fertilizer company Mosaic.  

Dupont De Nemours Inc (NYSE:DD) reported quarterly results that topped Wall Street estimates, sending its shares more than 6% higher.

Mosaic (NYSE:MOS) shrugged off third-quarter results that fell short of estimates to rise more than 3% on the day.

Take-Two (NASDAQ:TTWO), meanwhile, fell more than 12% after the video game maker cut its outlook on net bookings, stoking worries about demand as slowing global economic growth stifles consumer spending.

LYFT (NASDAQ:LYFT) was also deep in the red, down 21%, after the rideshare company reported mixed fiscal second-quarter results as earnings beat but revenue fell short of estimates.

Treasury yields, meanwhile, continue to retreat with the 10-year yield hovering around 4% with just days to go until fresh inflation data will likely resume focus on the Federal Reserve’s plan to hike rates.

Big tech, however, was mostly a drag on the broader market as Meta Platforms (NASDAQ:META) gave up some of its gains from a day earlier, while Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOGL) traded roughly flat.

In other news, Tesla (NASDAQ:TSLA) fell 1% as the electric vehicle maker is reportedly recalling more than 40,000 of its EVs in the U.S. that may experience a loss of power steering functionality. The EV maker, however, has released a firmware update to address the issue, The  Wall Street reported Tuesday.