U.S. Stocks Set To Open Higher As Traders Bet On Post-Election Stimulus

All Eyes On U.S. Presidential Election

S&P 500 futures are gaining ground in premarket trading as traders bet on a massive stimulus package after the U.S. presidential election.

Joe Biden is leading in the polls, and his win will likely lead to the introduction of a big stimulus bill that was previously proposed by Democrats. On the other hand, a clear Trump win will also be positive for the markets as he has conducted a market-friendly policy during his first term in the office and promised stimulus after the election.

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The main risk for stocks is a contested election. At this point, traders do not believe that this scenario is likely, but the situation may change quickly if the market does not learn who will be the next U.S. President on Wednesday.

[fx-article-ad]Oil Continues Its Rebound

WTI oil managed to settle above the $37 level and tried to get above $38 after Russias Minister of Energy discussed the extension of current production cuts with domestic oil companies.

The demand for oil is under pressure due to lockdowns in Europe, and the extension of current production cuts for the first quarter of 2021 is the main hope for oil bulls.

Equity traders are also enthusiastic, and stocks of oil majors like BP and Royal Dutch Shell are gaining more than 2% in premarket trading.

U.S. Dollar In Focus On Election Day

The was no shortage of bearish predictions for the post-election direction of the U.S. dollar as analysts bet that the new coronavirus aid package will put pressure on the American currency.

However, the U.S. Dollar Index rebounded from the recent lows at 92.50 to the 94 level as traders prepared for the upcoming U.S. election.

Today, the U.S. dollar found itself under significant pressure, which boosted commodities and precious metals like gold and silver. Meanwhile, gold and silver mining stocks look ready to continue their upside move which started a few trading sessions ago.

It remains to be seen whether post-election pressure on the U.S. dollar will be as strong as most analysts predicted. The U.S. Dollar Index lost plenty of ground since mid-March, and it will likely need additional negative catalysts to get below recent lows at 92.50. If this happens, commodity-related stocks will get a boost.

For a look at all of todays economic events, check out our economic calendar.