US open: Stocks gain following French election vote, investors eye tax reform

US equity markets were in the green on Monday over investor relief on centrist Emmanuel Macron winning the first round in the French presidential election and on hopes of possible tax reform.

European stocks had rallied after Macron first round victory and the optimism followed to Wall Street on Monday.

On opening, the Dow Jones Industrial Average added 1% to 20,755. The S&P 500 was up 0.9% to 2,370 and the Nasdaq rose 1.2% to 5,978, both hitting all time highs.

At 1551 BST, Dow Jones Industrial Average was rose 1.06% to 20,766.01, the S&P 500 was gained 1.01% to 2,372.48, and the Nasdaq added 1.11% to 5,976.22.

Meanwhile, West Texas Intermediate was down 0.87% to $50.27 per barrel and Brent crude fell 0.62% to $52.66.

Investors were hopeful that europhile Macron will beat off far-right nationalist and eurosceptic Marine Le Pen in the run-off in the french presidential election on 7 May. With 97.43% of votes counted, Macron had 23.86% to Le Pen's 21.43%.

Previous market jitters of far-left Jean-Luc Mélenchon possibly going through to the second round proved unfounded as he was left in fourth place, with scandal hit Conservative François Fillon in third place and Socialist Benoît Hamon in fifth.

Market participants had feared that two eurosceptics would have been in the final round, raising concerns of a possible ‘Frexit’ referendum held in France.

In currency markets, the dollar was down 1.23% versus the euro to 0.9210, after the single currency hit a five-month high against the greenback on the back of the election results.

The greenback was 0.78% firmer versus the yen at 109.94 as the risk-on trade meant investors moved away from safe-haven assets. Against the pound, the dollar was rose 0.26% to 0.7824.

Other safe-haven assets such as gold Gold on comex declined 1.3% to $1,272.40 per troy ounce while the yields for the 10-year Treasury note rose 1.83% from 2.23% last on Friday.

Jasper Lawler, senior market analyst, at London Capital Group, said: “Macron as President is not a done deal yet with the final result not known until May 5 but the way markets are reacting, it may as well be. There is some justification for the overconfidence in a Macron presidency.

"For the first time since before the 2015 UK general election the polls got it right in the first round of the French Presidential elections. As of Sunday night, markets are feeling a lot more confident in the polls showing an easy win for Macron in the second round."

Back in Washington, US president Donald Trump’s weekend tweet that he will announce a “massive” tax reform package this Wednesday may have got lost amid a wider focus on the French election.

“There were fears that the recent knockback on healthcare reforms may have stopped Trump in his tracks, yet this week’s announcement will put the bulls in the driving seat even when the French feel-good factor has faded,” Joshua Mahony, market analyst at IG, said.

In corporate news, Akari Therapeutics tumbled 12.28% despite the biopharmaceutical positing positive results for its drug that treats rare blood disease in a mid-stage clinical trial.

Hasbro gained 4.81% after the toyamker topped analysts’ forecasts as gaming revenue for the first quarter rose.

Halliburton rose 1.51% after the oilfield service company beat profit and earnings estimates thanks to a rise on drilling activity/.

Kimberly-Clark slipped 0.77% after beating earnings earnings forecasts but cut its lower end of sales guidance due to increasing competition.

On the data front, the Chicago Fed national activity index fell to 0.08 in March following a 0.27 gain in February, which was revised down from 0.34. A reading below zero of eth 85 indicators is below trend growth.

The three-month moving average was down to 0.03 from a revised 0.16 previously.

Later on Minneapolis Federal Reserve president Neel Kashkari will appear in a moderated discussion at the UCLA Anderson School of Management at 2015 BST.