Stocks rose and bonds dropped amid important elections in Georgia that could decide which party controls the U.S. Senate for the following 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 year since 2016. Energy shares surged as oil traded near $50 a barrel, even though the Russell 2000 Index of smaller companies jumped 1.7 %. With marketplaces factoring in an even greater chance of a Democratic sweep in Congress, some analysts see the chance for heightened volatility. In anticipation to the final result of the Georgia vote, which will likely be noted on Wednesday, Treasury yields climbed — with a key curve measure reaching its steepest level in 4 seasons. The dollar slipped to the lowest since February 2018.

Whether or perhaps not Wall Street is actually getting much more at ease with the idea of Democrats taking control of both chambers of Congress, the scenario seems to indicate the possibility of a more generous stimulus package. That could potentially cause upward pressure on inflation and rates as well as higher taxes to spend on fiscal aid. Conversely, must possibly Republican incumbent win re-election, the party would have sufficient votes to block some Biden initiative.

We don’t view a Democrat Senate as a bearish game changer in the short term because there’d still be a lot of positives in this sector, Tom Essaye, a former Merrill Lynch trader who created The Sevens Report newsletter, wrote in a note to clients. We would look to purchase on any material dip, although we must brace for even more volatility going forward when that’s the result at today’s election.

Meanwhile, President Donald Trump failed once again to invalidate his election loss of Georgia and allow the state’s Republican led legislature to declare him the winner — the latest courtroom defeat of his in a quixotic attempt to remain in office despite losing the Nov. 3 vote.

Another information growth which caught investors interest was the new York Stock Exchange’s surprise decision to spare 3 major Chinese telecommunications companies from being delisted. Treasury Secretary Steven Mnuchin called NYSE Group Inc. President Stacey Cunningham to voice his disapproval, in accordance with 2 people familiar with the issue. Many U.S. officials said the move marks a short-term reprieve, not an indicator that tensions between Washington and Beijing are actually easing.

Elsewhere, Saudi Arabia surprised the oil market with a major reduction in its output for March as well as February, carrying a greater burden of OPEC cuts while other makers hold steady or even make small increases.

What to view this week:

U.S. Congress meets to count electoral votes and declare the winner of the 2020 Presidential election Wednesday.
FOMC mins out Wednesday.
U.S. unemployment report for December is actually due Friday.
These are some of the main movements in markets:

Stocks
The S&P 500 Index rose 0.7 % as of 4 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 3 basis points to 0.58 %.
Britain’s 10-year yield climbed four 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.