Banks — especially vulnerable because they’re hurt both by the slowdown and low interest rates — were some of the worst performers on Wednesday. JPMorgan Chase & Co. and Bank of America Corp. were two of the biggest drags on the S&P 500.
Meanwhile, the election still has to be settled. Trump has already falsely claimed victory, said counting should stop and pledged to go to the U.S. Supreme Court, though his meaning was unclear.
“The absolute low point of the night, hands down, was seeing the currently-sitting president of the United States intimating that certain legally cast votes shouldn’t be counted,” Keith Buchanan, portfolio manager at GLOBALT Investments, said in a phone interview. “From a market participant standpoint, that is the most fear-inducing and volatility-inducing point of the evening.”
But investors were ready for volatility in the build-up to the vote. The Cboe Volatility Index, the options-derived measure of expected price swings for the S&P 500 known as the VIX, was above 40 a week ago compared with a one-year average of less than 28.
VIX is retreating on Wednesday despite close election
“The whole market was braced,” said James Masserio, co-head of equities and equity derivatives for the Americas at Societe Generale. “We were running special election risk scenarios: what happens if you have this kind of sector rotation? What happens if you have rates and equities move? Everybody saw this coming.”
The VIX dropped 6.6 basis points as of 11:10 a.m. in New York.
“Everyone kind of knew, no matter what, the results weren’t going to happen last night,” said Varghese Thomas, president and COO of TradingScreen. “Everyone’s buckled in and ready for the ride. And so far it hasn’t been as bumpy from a markets perspective.”
This article was provided by Bloomberg News.