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U.S. futures up as election results trickle in

Yahoo Finance’s Melody Hahm and Brian Cheung, Yahoo News National Reporter Marquise Francis, and Yahoo News West Coast Correspondent Andrew Romano discuss how the market has been reacting to election results as U.S. futures spike.

Video Transcript

MELODY HAHM: Of course, we want to take a look at the market action that we're seeing today. It is after hours, of course, but what are we expecting for the trading day as we anticipate another day on Wall Street? Dow, S&P NASDAQ futures all kind of surging higher throughout the course of this evening.

Brian Cheung, I'll get straight to you. Are you surprised by this movement we're seeing right now? Many of the strategists and economists we talked to at Yahoo Finance sort of have baked in a potential contested election, right? What do you think is causing this exuberance as we look to the markets here.

BRIAN CHEUNG: Well Melody, everyone who has been watching this election is already feeling a lot of anxiety, and watching the market does not provide it any more relief. In fact, it could be even more nauseating to have watched the market action over the previous hours.

As you mentioned, we're in after hours trading, not necessarily as liquid markets as we usually see during the market day. S&P futures appear to be up pretty substantially, about 1.15%. Dow futures up just a little bit, about 122 as of right now.

But what's been interesting is that it's really been teetering across the day, actually. Between the periods of 7:45 and 9:50 PM Eastern time, they were in the negative and then rocketed higher. In fact, the gains on the Dow were substantially higher about an hour ago. They've since come down a little bit, although, they are still holding on to their gains.

But what's been even more interesting has really been movement in the currencies markets as well. When you take a look at the US dollar strengthening broadly across a basket of other currencies, you can check out how the euro in addition to the British pound have gotten weaker against the US dollar. But when you look at specifically the Chinese yuan, the USD to CNH, that is offshore yuan, the yuan has really gotten quite weak against the US dollar.

You could argue to what degree is that pricing in maybe the optimism over a Trump win there. That could explain some of the yuan weakness. You also see some of the dollar strengthening and other types of currencies, specifically, the Mexican peso another one worth watching there.

And then moving over to bond yields, a very interesting dynamic in play there as well. When you look at the 10-year and the 30year losing a little bit of steam, that does show that there could be some inflows into those bonds as people try to look for safe assets.

But again, quite noisy especially as the stock markets continue to rock back and forth. Again, whether or not you can glean anything from these futures and markets, whether or not they're pricing in a Trump or a Biden victory, is a bit too noisy right now to discern. Maybe we'll get a little bit more certainty, but there's no doubt, Melody, of the volatility at least for the past few hours has been quite elevated.