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Stocks rose sharply on Thursday as election results rolled in and economic data and Federal Reserve comments hit the wires. 

The Dow Jones Industrial Average rose 1.95%, or 542 points, to 28,349. The S&P 500 also rose 1.95%, to 3,510. The tech-heavy Nasdaq Composite rose 2.59%, to 11,867. In a largely risk-on market, the 10-Year Treasury yield rose to 0.77% from 0.75% as the yield curve expanded, reflecting firming inflation expectations. 

Vice President Joe Biden has a lead in the Electoral College, with results from Pennsylvania, Georgia, and Nevada still pending. It looks like Republicans will control the Senate and Democrats will control the House. This gridlock likely means a far smaller fiscal stimulus package than Democrats had wanted. 

Still, economically sensitive sectors like retail, manufacturing, and banking all rose. TJX (ticker: TJX) gained 2.57% and Burlington (BURL) rose 3.13%. Caterpillar (CAT) was up by 5.11%. As the yield curve expanded, the SPDR S&P Bank ETF (KBE) rose 3.66%. 

Initial jobless claims for the past week came in at 728,000, better than last week’s 758,000. This continues the trend of falling jobless claims every few weeks, keeping investors optimistic that the economic and labor market recovery has momentum. 

Also, the Federal Reserve confirmed that it would continue its Treasury purchasing program of tens of billions of dollars a month, keeping short-term interest rates pinned near 0%. That was expected. Since market participants and observers expect a fiscal stimulus bill of less than $1 trillion in light of the elation results, many think the Fed will be compelled to increase the size of its bond-buying program. That would keep interest rates low, supporting the economy and the stock market. 

“Should conditions worsen for the economy, we suspect the Fed will rely on the expansion of asset purchase programs,” said Charlie Ripley, senior investment strategist at Allianz Investment Management. “There was no update to the economic projections at this meeting, but the economy continues to perform better than the Fed has expected since the recovery began.”

Tech stocks were the day’s real winners. The NYSE FANG+ Index rose 1.96%. The iShares PHLX Semiconductor ETF (SOXX) rose 4.49%. Qualcomm (QCOM) shares rose 12.75% after beating earnings estimates.

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