While investors generally prefer Hillary Clinton to the uncertainty of Donald Trump, many do not want to see complete Democratic control of Washington. And Wall Street still generally favors conservative economic policies. | AP Photo Wall Street rallies on Clinton hopes Comey's announcement, stable polling lead, buoy a stock market that's fearful of Trump.

NEW YORK – Wall Street is celebrating the 2016 election results a day early.

Stocks soared on Monday while the Mexican peso rallied as investors bet the latest news out of the FBI and early voting results would help Hillary Clinton cruise to victory in the presidential election over Republican nominee Donald Trump.


The gains came as markets shook off an anxiety attack suffered in recent days over the increasing possibility of a surprise Trump win, a result investors fear would crush stock prices and lead to global financial instability given Trump’s unpredictability on economic and foreign policy.

“The Comey announcement turned the tide on what had been a bad week for Clinton,” said Steve Massocca, managing director at Wedbush Equity Management, referring to the announcement from FBI director James Comey on Sunday that the bureau would not change its recommendation of no charges against Clinton over her use of a private email server while serving as Secretary of State. “And it sounds like turnout on the Democratic side in early voting will be enough to win the day. Add it all together and it looks like a Clinton win and that’s what markets want to see.”

The Dow Jones Industrial Average rose 371 points on Monday, or 2 percent, while the S&P and Nasdaq jumped over 100 points also rose over 2 percent. The gains reversed days of selling that began when Comey announced he would review new emails discovered in the Clinton email case. Wall Street’s “fear gauge,” the VIX volatility index, also spiked as Trump’s fortunes rose. It dropped 16 percent on Monday.

The Mexican peso, which tends to drop when Trump rises over fears about his protectionist trade policies, jumped around 2 percent against the dollar on Monday. The rally began Sunday immediately after the Comey announcement with futures contracts for major US stock indices rising. The gains continued when Asian markets opened Monday and gathered pace after the opening bell on Wall Street.

Some of the gains also stem from Wall Street’s belief that while Clinton is likely to win, Republicans will probably hold onto at least the House of Representatives and possibly the Senate. Markets tend to like divided government, as it would act as a check on Clinton’s ability to raise taxes, enact new regulations or alter existing trade policies.

While investors generally prefer Clinton to the uncertainty of Trump, many do not want to see complete Democratic control of Washington. And Wall Street still generally favors conservative economic policies.

“Markets now believe Clinton wins but never assumed the House would be swept up in the wave,” said David Kotok, chief investment officer at Cumberland Advisors. “And in the few moments when they worried about a big wave, stocks took a drubbing. Markets want a check and balance system and the wave threat now appears to be off the table.”

Kotok said Cumberland’s gauges of volatility reached “asymmetrical extremes” when it appeared Trump might win after the initial Comey letter. “We used that opportunity to become fully invested in the US stock market and now we are feeling pretty good in terms of market confidence given the recent turn of events.”

Billionaire investor David Tepper, founder and president of Appaloosa Management, who supported Mitt Romney in 2012, went on an extended rant about Trump in an appearance on CNBC on Monday morning and expressed the general view around Wall Street that Clinton would probably govern more as a moderate than a progressive bent on enacting new banking regulation and widely higher tax rates.

“I’m not going to sit here and say Hillary Clinton is in any way shape or form a saint. Never going to say that or that she has great economic policies,” he said, adding that she “is probably to the right of [President] Obama on a lot things, and I hate to say that, because I don’t want to piss off the Bernie [Sanders] people, but it is true.”

Tepper said he hoped the House and Senate would remain in GOP control “just as a check on some of the platform economic policies.”

This view, that a Clinton White House and a GOP congress would be best for markets, pervades Wall Street. In a note to clients over the weekend, Goldman Sachs analysts wrote that “two weeks ago, investors voiced concern about the possibility of a Democratic ‘wave election,’ which would make policy changes more likely, and expressed hope the race would tighten.”

The race has now tightened but not the point that Trump is expected to win, producing the Wall Street goldilocks scenario that lifted markets on Monday.

“Add it all together and you get this relief rally after concern that this thing was slipping away fro Clinton,” said Massocca, himself a Republican who doesn’t support Trump “And you had a crazy seeming person on the other side who could win and who knows what would happen then.”