Stock Market Today: Dow, S&P Live Updates for Jan. 6, 2021

Photographer: Ali Mohammadi/Bloomberg

Asian stocks were off to a muted start Wednesday as traders awaited the outcome of key elections in Georgia that could have implications for President-elect Joe Biden’s agenda.

Stocks saw modest gains in Japan, while South Korea’s Kospi Index topped the 3,000 level for the first time. Australian equities retreated. S&P 500 futures were little changed after the benchmark rebounded from its worst start to a year since 2016. Treasuries were steady after yields climbed Tuesday as markets mulled the idea of Democrats taking control of both chambers of Congress, which would imply the possibility of a more generous stimulus package. The dollar traded at its lowest since February 2018 against its major peers.

Elsewhere, oil pared overnight gains after surging past $50 a barrel for the first time since February as Saudi Arabia pledged to voluntarily cut output by an extra 1 million barrels a day. China’s market open will be in focus after President Donald Trump signed an order banning U.S. transactions with eight digital Chinese payment platforms including Ant Group Co.’s Alipay.

In the short term, at least, the pandemic is taking a back seat as markets brace for the outcome of the Georgia runoff, with results expected on Wednesday. Democrats taking control of both houses of Congress could also potentially lead to upward pressure on inflation and interest rates as well as higher taxes to pay for fiscal aid. Conversely, should either Republican incumbent win re-election, the party would have enough votes to block any Biden initiative.

“Democrats would need to win both races to control the Senate and hence both houses, allowing them far more freedom to run larger fiscal packages,” Sebastien Galy, senior market strategist at Nordea Investment, said in a note. “A dual win should lead to a steeper curve and a weaker dollar as the fiscal situation would be seen as unsustainable, but it would also be welcomed by the equity market, particularly cyclicals, while in growth pressure might appear on the monopolistic Internet giants.”

Meanwhile, tensions between the U.S. and China ratcheted up with Trump’s order banning U.S. transactions with Chinese payment apps. Earlier, the New York Stock Exchange decided to reconsider its decision to halt the delisting of three major Chinese telecommunications firms after Treasury Secretary Steven Mnuchin told the Big Board he opposed its shock announcement to grant the companies a reprieve. Chinese shares closed at a 13-year high Tuesday.

On the coronavirus front, the U.S. Food and Drug Administration urged that vaccines be given according to how they were authorized, in a rebuke to officials attempting to alter the timing and dosage of shots. Experts advising the World Health Organization recommended against extending the interval between two doses, a plan under consideration in the U.K.

Oppenheimer chief investment strategist John Stoltzfus told clients in a Monday note that a Democratic sweep in the Georgia Senate runoff vote will cause U.S. stocks to fall between 6% and 10%.

What to watch this week:

U.S. Congress meets to count electoral votes and declare the winner of the 2020 Presidential election Wednesday.
FOMC minutes out Wednesday.
U.S. unemployment report for December is due Friday.

These are some of the main moves in markets:

Stocks

S&P 500 futures were little changed as of 9:06 a.m. in Tokyo. The S&P 500 rose 0.7%.
Topix index rose 0.4%.
Australia’s S&P/ASX 200 Index slipped 0.3%.
South Korea’s Kospi index gained 1%.
Hong Kong’s Hang Seng Index futures rose 0.7%.