Stocks closed higher on Tuesday on the expectation the midterm election and a Federal Reserve decision would create a more business-friendly environment, though many traders forecast a selloff in the days ahead.
The S&P 500 index has risen almost 14 percent since September on speculation of Republican congressional gains and new measures by the Federal Reserve to stimulate the economy.
"The market is expecting Republicans to at least take one House, and that's a big reason why we traded up over the past few months," said Scott Wren, senior equity strategist at Wells Fargo Advisors in St. Louis.
"There's a high probability that we'll see a modest pullback afterward as the euphoria fades."
Most polls show Republicans regaining control of the House of Representatives, while President Barack Obama's Democrats could be left with a narrow majority in the Senate.
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Dow Jones Industrial Average
(DJI: ^DJI)| Index Value: | 11,188.72 |
|---|---|
| Trade Time: | 4:01PM EDT |
| Change: |  64.10 (0.58%) |
| Prev Close: | 11,124.62 |
|---|---|
| Open: | 11,125.22 |
| Day's Range: | 11,125.22 -11,219.52 |
| 52wk Range: | 9,596.04 -11,309.00 |
