Wall Street ended sharply higher on Tuesday in a broad rally as millions of Americans headed for polls and awaited results from a tightly fought U.S. Presidential election, while fresh data signaled a solid economy. All three major indexes ended in positive territory.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) rose 1% or 427.28 points, to end at 42,221.88 points.

The S&P 500 jumped 1.2% or 70.07 points, to close at 5,782.76 points. Utilities, tech and consumer discretionary stocks were the biggest gainers.

The Utilities Select Sector SPDR (XLU) added 1.5%. The Technology Select Sector SPDR (XLK) gained 1.4%, while the Consumer Discretionary Select Sector SPDR (XLY) rose 1.8%. All the 11 sectors of the benchmark index ended in positive territory.

The tech-heavy Nasdaq climbed 1.4% or 259.19 points to finish at 18,439.17 points.

The fear-gauge CBOE Volatility Index (VIX) was down 6.78% to 20.49. Advancers outnumbered decliners on the NYSE by a 4.44-to-1 ratio. On the Nasdaq, a 2.67-to-1 ratio favored advancing issues. A total of 12.64 billion shares were traded on Tuesday, higher than the last 20-session average of 11.77 billion.

Stocks Rally on Election Day

Millions of Americans came out to vote on Tuesday to elect the nation’s 47th president. The last few sessions saw choppy trading, with markets ending in the red on Monday. However, stocks bounced back on Tuesday as investors awaited results from a high-stakes presidential election.

The contest between Vice President Kamala Harris and former President Donald Trump is expected to be tight. Besides investors will also be closely watching which party takes Congress as a clean sweep by the Democrats or Republicans could result in major changes in spending and tax policy.

The election result could keep Wall Street volatile for a longer period as investors will take some time to gauge how markets will perform under the new leadership.

There were no obvious stock market bets tied to the election on Tuesday. Instead, it was a broad rally. Shares of NVIDIA Corporation ((NVDA Quick QuoteNVDA - Free Report) ) rose 2.8%. NVIDIA carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Services Sector's Growth Signals Economy's Strength

The Institute for Supply Management (ISM) said on Tuesday that its non-manufacturing purchasing managers index (PMI), rose to 56 in October, its highest level since August 2022, and up from 54.9 in September. Economists had forecast a reading of 53.

Any reading above 49 indicates overall economic expansion. This further fueled Tuesday’s rally.

Investors will also be eagerly awaiting the Federal Reserve’s decision on interest rates it its two-day policy meeting gets underway on Wednesday. Market participants are expecting a 25-basis point rate cut in November and another quarter percentage point rate cut in December.

Economic Data

In other economic data released on Tuesday, the U.S. trade deficit rose to $84.4 billion to hit a 2-1/2 year high in September.