Stocks rose and bonds dropped amid key elections in Georgia that should determine which party controls the U.S. Senate for the next two years, setting the scope of President-elect Joe Biden’s agenda.

In a session marked by thin trading volume, the S&P 500 rebounded after suffering its worst start to a season after 2016. Energy shares surged as oil traded near $50 a barrel, while the Russell 2000 Index of smaller companies jumped 1.7 %. With markets factoring in a greater chance of a Democratic sweep in Congress, several analysts see the potential for heightened volatility. In anticipation to the final result of the Georgia vote, which will probably be recognized on Wednesday, Treasury yields climbed — with a key curve measure reaching the steepest amount of its in four years. The dollar slipped to probably the lowest since February 2018.

Whether or perhaps not Wall Street is becoming much more at ease with the thought of Democrats taking control of both chambers of Congress, the scenario implies the chance of a considerably more generous stimulus package. That could likely cause upward pressure on rates as well as inflation as well as higher taxes to spend on fiscal tool. Alternatively, should either Republican incumbent win re-election, the party would have adequate votes to block any Biden initiative.

We do not view a Democrat Senate as a bearish game changer in the temporary because there would still be a great deal of positives in this sector, Tom Essaye, a former Merrill Lynch trader which created The Sevens Report newsletter, wrote in a note to clients. We’d appear to buy on virtually any components dip, although we should brace for even more volatility going ahead when that’s the end result at today’s election.

Meanwhile, President Donald Trump failed again to invalidate his election loss of Georgia and let the state’s Republican led legislature to declare him the winner — his latest courtroom defeat in a quixotic attempt to stay in office despite losing the Nov. three vote.

Another news growth that caught investors interest was the new York Stock Exchange’s surprise choice to spare 3 major Chinese telecommunications companies from being delisted. Treasury Secretary Steven Mnuchin called NYSE Group Inc. President Stacey Cunningham to express his disapproval, according to two people accustomed to the issue. Several U.S. officials said the move represents a temporary reprieve, not a sign that tensions between Washington and Beijing are easing.

Elsewhere, Saudi Arabia surprised the oil market with a big decline in the output of its for March as well as February, carrying a much better burden of OPEC cuts while some other makers hold steady or perhaps make modest increases.

What you should enjoy this week:

U.S. Congress meets counting electoral votes and declare the winner of the 2020 Presidential election Wednesday.
FOMC minutes through Wednesday.
U.S. unemployment report for December is due Friday.
These’re some of the key moves in markets:

Stocks
The S&P 500 Index rose 0.7 % as of four p.m. New York time.
The Stoxx Europe 600 Index declined 0.2 %.
The MSCI Asia Pacific Index climbed 1.1 %.

Currencies
The Bloomberg Dollar Spot Index sank 0.5 %.
The euro gained 0.4 % to $1.2291.
The Japanese yen appreciated 0.4 % to 102.74 per dollar.

Bonds
The yield on 10-year Treasuries rose 4 basis points to 0.95 %.
Germany’s 10-year yield jumped three basis points to 0.58 %.
Britain’s 10 year yield climbed 4 basis points to 0.209 %.

Commodities
West Texas Intermediate crude surged 4.9 % to $49.93 a barrel.
Gold rose 0.3 % to $1,948.17 an ounce.