Stocks rose and bonds dropped amid key elections in Georgia that will decide which party controls the U.S. Senate for the next two years, setting the scope of President-elect Joe Biden’s agenda.
In a session marked by thin trading volume, the S&P 500 rebounded after suffering its worst start to a year since 2016. Energy shares surged as oil traded near $50 a barrel, while the Russell 2000 Index of smaller companies jumped 1.7%. With markets factoring in a greater chance of a Democratic sweep in Congress, some analysts see the potential for heightened volatility. In anticipation to the outcome of the Georgia vote, which will likely be known on Wednesday, Treasury yields climbed -- with a key curve measure reaching its steepest level in four years. The dollar slipped to the lowest since February 2018.