Stocks initially fell then rose before the election night session, with the SPX having an 86% probability of closing higher today.

According to PolyBeats monitoring, on the evening of November 3, US Eastern Time, after the probability of a Democratic sweep rose sharply, traders compiled that Dow futures fell about 0.76%, S&P futures fell about 1.13%, and Nasdaq futures fell nearly 2%. Mainstream stock markets recovered their losses and turned positive in the latter part of election night: the Associated Press reported that during Asian trading hours, S&P futures rose about 0.2% and Dow futures rose about 0.4%.

On the prediction market Polymarket, the probability of "S&P 500 (SPX) closing higher on November 4" first fell to a low of 14%, then rose steadily and is currently 86%.

0x06b2…9f35 bought $1,900 of "Down". This account's win rate across 94 markets in the SPX category is 52.1%, with PnL +$141.2k and ROI +27.9%. The amount invested in this trade is 0.36 times its average investment in this category.

In public discussion, Bank of America was cited as saying that under a sweep scenario, the stock market could come under pressure of more than 10%; JPMorgan's scenario estimates put the short-term S&P move corresponding to a Democratic sweep of both chambers at roughly a decline of about 0.25% to a gain of 0.50%.

The historical side is often used to explain the rebound: since 1982, the S&P has posted positive returns in the year after all 11 midterm elections, with an average gain of about 13.7%. Trader Craig Shapiro posted before Election Day that a Democratic sweep was almost fully priced in, but the Nasdaq is pinned near its 200-day moving average, and AMD and Arista options are still pricing in moves of more than about 8%.