By Liz Moyer
Investing.com -- Tech and growth stocks got a fresh jolt of adrenaline on Wednesday as the prospect of a divided Congress next year put a stop to the reflation trade.
The Dow Jones Industrial Average and NASDAQ Composite each rose more than 400 points. A divided Congress means there’s less likelihood Democrats can push through a big spending bill, as well as raise taxes and hike regulations.
A contested election for the White House is adding uncertainty to the near-term. The timing of a new stimulus bill from Capitol Hill is murky, especially since the two sides could not agree on the scope and size of a plan even before the election.
Earnings continue to roll out, giving investors a glimpse at how well -- or how not well -- companies are managing through the economic recovery. The Federal Reserve is also expected to opine on rates on Thursday.
Here are three things that could affect markets tomorrow:
1. Healthcare and drug makers in view
Healthcare is bound to be a topic next year no matter who takes the White House, but a split Congress may make it difficult for Democrats to make much progress on expanding coverage. Meanwhile, drug prices will be under scrutiny.
Cigna Corp (NYSE:CI) shares soared 14% on Wednesday. It is expected to report earnings of $4.24 a share on revenue of $39 billion. Bristol-Myers Squibb Company (NYSE:BMY), up 6%, is seen reporting EPS of $1.49 on revenue of $10 billion. AstraZeneca PLC (LON:AZN), up 6%, is seen reporting EPS of 50 cents on revenue of $6.6 billion.
2. Gold shines on Barrick
Gold has been a hot trade this year as investors seek a haven from a falling dollar and volatile markets. The yellow metal touched a high above $2,000 this summer and has since traded back down to around $1,900, but many have an optimistic view on the next year.
Barrick Gold Corp (NYSE:GOLD), the mining company that recently attracted an investment from Warren Buffett’s Berkshire Hathaway Inc (NYSE:BRKa), is one of the companies that benefitted from rising gold prices in the most recent quarter. Analysts tracked by Investing.com expect it to report EPS of 32 cents on revenue of $3.37 billion.
3. The Fed could speak on the economic outlook
Investors await word from the Federal Open Market Committee, which held its periodic two-day meeting this week and will release a statement at 2:00 PM ET (1800 GMT). Analysts expect it to hold its short term rate at 0.25%.
Fed officials could speak on the direction of the economy and what the outlook is given the uncertainty of Covid. Several of them have spoken publicly in recent months about the need for more stimulus to support a recovery, though Congress has been unable to reach an agreement on a plan to give aid to households and businesses.