Equity investors snapped a pre-election run of selling as the prospects of a divided US congress sparked a sharp rally, led by the tech stocks that have powered the market this year.
The S&P 500 benchmark of US blue-chips had its best week since April, reversing a 6 per cent dip in the three weeks before the election in a sharp turn away from cyclical stocks and back towards big tech.
The so-called blue wave — a Democratic sweep of both chambers of Congress and the presidency that pollsters had long predicted — did not materialise. In its place political gridlock loomed as Joe Biden appeared to be closing in on the presidency while Republicans edged ahead in the race for the US Senate.
The potential of a divided government lifted tech stocks to their strongest weekly gain since mid-April, as the likelihood of sweeping changes to business regulation and taxation…