Technology stocks experienced a significant increase as U.S. citizens participated in the election, with these gains occurring before any results were available to indicate a potential presidential winner.

The overall U.S. stock market demonstrated positive movement, with the S&P 500 index increasing by 1.78% to reach 3,369.11 – marking one of the strongest Election Day performances for the S&P. Simultaneously, the Nasdaq Composite, which is weighted towards technology companies, rose by 1.85% to close at 11,160.57. With the exception of one sector, all sectors showed gains today. The energy sector was the single outlier, declining by approximately 0.75%. Software as a Service (SaaS) and cloud-computing stocks mirrored the broader market trend, finishing the day up 2.28%.

While this increase may appear modest, it’s important to consider the previous month’s performance. The Nasdaq had fallen by just over 8% from its all-time high at the beginning of today’s trading session. Consequently, today’s gains represent roughly one-quarter of the recovery needed to return to recent peak levels. Having previously dropped more than 10% from its recent high before beginning a recovery in late October, today’s rally contributes to an emerging positive trend.

The market’s reaction can be interpreted as support for the proposed policies of either candidate, depending on individual perspectives.

These stock market movements follow a mixed earnings season for the technology sector, where several major companies faced challenges, while some smaller companies, such as Five9, benefited from the effects of COVID-19 to achieve strong results. Companies like Netflix, Intel, and Apple did not generate the positive investor response they had hoped for. In fact, the domestic stock market’s reaction to companies exceeding earnings expectations has been subdued during this reporting cycle, suggesting that U.S. equities were already anticipating strong performance.

For the technology sector, today’s recovery is a positive development, potentially facilitating a wave of initial public offerings (IPOs) anticipated before the end of the year. Companies like Airbnb and DoorDash remain potential candidates for going public this year.

The stock prices of certain companies, particularly Uber and Lyft, were already increasing on Monday due to investor confidence that California voters would approve Proposition 22. If passed, this ballot measure would exempt these ridesharing companies from a recently enacted California law requiring gig economy workers to be classified as employees instead of independent contractors.

Looking at the broader picture, Uber’s share price is still down approximately 3.87% compared to one month ago. However, it has been showing signs of recovery, with gains over the past two days. Uber’s share price increased by 2% to close at $35.77 today. Lyft has experienced an even more substantial increase in recent days, with its shares closing up 7.06% at $26.23 today.

The outcome of the election is particularly significant for Uber and Lyft. The companies have stated that if Proposition 22 is not approved, they will be required to alter their business operations. Both companies have warned of potential temporary service suspensions in the state if they are compelled to comply with the new California law. Currently, investors appear to believe that Uber and Lyft will be able to maintain their existing business model.