US stocks surged on Tuesday for a third consecutive day,
with Election Day bringing another rise for Wall Street. The S&P 500 rose
21.31, or 0.56%, to 3,828.11, though it swung between an even bigger gain and a
moderate loss to get there. The Dow Jones Industrial Average climbed 333.83
points, or 1%, to 33,160.83. The Nasdaq composite jumped 51.68, or 0.5%, to
10,616.20.

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With Americans heading to the polls across the country amid
soaring inflation and concerns of a possible recession, analysts say investors
appear to be voting for Republicans to gain control of at least one house of
Congress.

If Republicans do end up gaining control of at least the
House of Representatives, the ensuing reaction in financial markets could be
moderate, said economists at Goldman Sachs. Stocks have already jumped in
expectations, with two straight rallies of 1% before Election Day. However, a
surprise win by Democrats could upset the market if it leads investors to expect
higher corporate taxes and other policy changes.

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Markets are closely watching for Thursday’s upcoming report
on inflation as the data will likely carry much more influence over what the
Federal Reserve does with rates.

The Fed is intentionally slowing the economy by raising
interest rates and making it more expensive to borrow money. That in turn
should hopefully curb inflation, which is at its highest level in four decades.
The concern for markets is that high-interest rates drag down prices for stocks
and other investments while raising the risk of a recession if rates go too
high.

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The Fed has already hiked its key overnight rate to a range
of 3.75% to 4%, up from virtually zero in March, and more investors are
expecting it to top 5% next year.

A softer-than-expected figure on Thursday could give the
central bank a leeway to loosen up a bit after hiking interest rates at a
furious pace this year. Economists expect the report to show a continued,
slight moderation from a peak set during the summer.

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Stocks are also moving on corporate profit reports, as
earnings season enters its tail end. Take-Two Interactive plunged 13.7% after
posting weaker-than-expected results for the latest quarter.

Shares of cryptocurrency-related companies also fell
sharply, with Coinbase Global falling 10.8% and Robinhood Markets losing 19%.

They dropped with crypto prices after the world’s biggest
crypto exchange by daily volume Binance, said it intends to acquire one of its
bigger rivals, FTX.

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Binance is purchasing to help FTX manage a crunch where
users have been pulling money out amid fears about its financial strength.
Bitcoin at one point slipped below $17,500 before pulling back to $18,267, down
12.2% from a day earlier, according to CoinDesk.