Business

Wall Street Is Also Relieved the FBI Cleared Clinton

A boost for the Democratic candidate’s campaign translated into a surge across financial markets.

By Adam Chandler
Brendan McDermid / Reuters

Until now, the clearest indication of Wall Street’s preference for a Hillary Clinton presidency revealed itself after the first debate, which Clinton was widely viewed to have handily won.

“Soon after the debate ended, stock markets celebrated the news of Trump’s loss,” my colleague Derek Thompson wrote last month. “Markets in the U.S., U.K., and Asia soared, the price of crude oil rose, and the currencies of America’s closest trading partners, such as Mexico and Canada, ticked up as well.”

But this campaign has been nothing if not melodramatic. Following the debate, as well as Trump’s “locker-room talk” scandal, the polls and the markets tightened again after FBI Director James Comey announced, 11 days before the election, that the agency would look into more of Clinton’s emails.

On Sunday evening, like several times before, that latest whiff of scandal evaporated into the ether. Comey cleared Clinton (again) and the impact was immediately seen in financial markets. According to AP, the Dow Jones index futures “jumped about 200 points,” ending a nine-day slide that started with the renewed negative attention Comey’s letter directed toward the Clinton campaign late last month. “The S&P 500 tumbled about 20 points in the 40 minutes after Comey’s first letter was made public,” noted Bloomberg.

On Monday morning, after Comey’s most recent announcement, the rally continued, with the Dow surging more than 300 points, the S&P 500 up more than 40 points (more than 2 percent), and the Nasdaq 2.3 percent higher by early afternoon. Meanwhile, after over a week of poor performance, the value of the U.S. dollar gained .77 percent against other currencies on Monday. And the Mexican peso, which has tended to falter as Trump’s chances improve, surged about 2.5 percent.

It is more than a little ironic that between the two major party candidates, Clinton is the one who has most forcefully called for reforming Wall Street and raising taxes on the wealthiest Americans. Also, as Thompson noted, investors have historically looked more favorably upon Republican victories in presidential elections.

Nevertheless, Clinton seems to offer markets what Trump, seemingly by design, does not: predictability. “Markets want continuity and essentially they want what they have priced in and both point towards Clinton,” one market analyst told Reuters. “That’s why markets are reacting to anything that boosts Clinton’s chances by taking back some of the selloff from the past week or so.”

Regardless of the outcome of tomorrow’s election, the markets, like millions of Americans, will need some time to recover.