Stocks on major markets rose along with the euro on Thursday as a market-friendly presidential candidate led in opinion polls ahead of elections in France on Sunday.
Former French finance minister, Emmanuel Macron, maintained a slim lead in polls, but the election is still a four-way battle in the first round vote on April 23. Should Macron rank first or second in Sunday’s election, he is seen easily winning the runoff vote on May 7 after remaining candidates are eliminated.
However, after surprises in last year’s U.S. election and the UK Brexit referendum, voter indecision and low turnout could catch markets wrong-footed yet again.
France’s CAC stock index jumped 1.5%, its strongest daily performance since March 1.
On Wall Street, stocks rose as traders continued to bet on a strong earnings reporting season. Profit expectations have risen in the last two weeks and S&P 500 stock index company earnings now are expected to have gained 11.1% in the first quarter.
“You look at a day like today and it tells you there is a lot of cash on the sidelines that wants an opportunity to buy when the market sells off even just a little bit,” said Phil Blancato, CEO of Ladenberg Thalmann Asset Management in New York.
The Dow Jones Industrial Average was up 174.22 points, or 0.85%, to 20,578.71, the S&P 500 gained 17.67 points, or 0.76%, to 2,355.84 and the Nasdaq Composite added 53.74 points, or 0.92%, to 5,916.78.
The Nasdaq closed at a record.
The pan-European FTSEurofirst 300 index ended up 0.18% and MSCI’s gauge of stocks across the globe gained 0.63%. Emerging market stocks rose 0.58%.
EURO HOLDS NEAR 3-WEEK HIGHS
The euro held near a three-week high against the U.S. dollar as some traders closed out bets made on the grounds that the common currency would fall ahead of or after the election.
“Euro bulls will definitely respond to positive news around Macron, but that dissipates as the reality of low turnouts sets in,” said Alfonso Esparza, senior currency analyst at OANDA in Toronto.
The euro was up 0.09% against the dollar at $1.0719 after hitting a three-week high of $1.0777 earlier in the session.
Oil prices ended mixed, as investors weighed rising U.S. production against geopolitical uncertainties.
U.S. crude prices settled down 17 cents at $50.27 a barrel. Brent futures posted modest gains, however, ending up 6 cents to $52.99.
U.S. Treasury yields rose as investors waited on the results from the French election and as rising risk appetite boosted stocks, after yields fell earlier and broke below key technical resistance.
The 10-year note fell 12/32 in price to yield 2.25%. The yield briefly fell as low as 2.165% on Tuesday, the lowest level since Nov. 10, and it has tumbled from 2.63% on March 14.
In other commodity markets, U.S. gold futures fell 0.09% to $1,282.60 an ounce.