(Bloomberg) -- U.S. stocks were poised to end a nine-day slide, with the S&P 500 Index on track for the strongest rally in four months amid speculation that Hillary Clinton's prospects in the presidential election were boosted after the FBI reiterated her handling of e-mails wasn't a crime.
Banks, technology companies and drugmakers paced the early rebound, with lenders headed toward their biggest one-day gain since August. JPMorgan Chase and Microsoft advanced more than 2.3%, while Biogen climbed the most in three months.
The benchmark gauge surged 1.5% to 2,117.26 at 9:50 a.m. in New York, on track to halt its longest losing streak since 1980, a slump that erased $725 billion in value from U.S. equities. The Dow Jones Industrial Average gained 260.22 points, or 1.5%, to 18,148.50, and the Nasdaq Composite Index increased 1.7%.
"We've been down nine straight days as concerns over a potential Trump victory put a lot of caution in the market," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. "Some of that is being relieved with the comments from the FBI about the Clinton e-mail investigations. All today guarantees is that there will be more volatility for the rest of the week following tomorrow's election."
FBI Director James Comey said Sunday in a letter to Congress his agency maintained its July conclusion that it wouldn't recommend criminal charges against Clinton. His announcement Oct. 28 that the FBI was examining new e-mails potentially related to its review of her use of a private server roiled the presidential race and spurred a selloff in equities.
American stocks have shown themselves sensitive to Clinton's presidential prospects, with futures rising in September during the first debate she was widely considered to have won. The S&P 500 tumbled about 20 points in the 40 minutes after Comey's first letter was made public. While the race has been tightening before tomorrow's vote, Clinton still maintains a narrow lead over Republican rival Donald Trump, according to an average of polls by RealClearPolitics. An FBI spokesman declined to elaborate Sunday on Comey's letter.
Apprehension over the election's outcome rose last week among investors still smarting from being caught wrong-footed after the U.K. voted to leave the European Union. The CBOE Volatility Index pushed its advance to 73% over nine days in the longest climb on record, while investors pulled the most money in three weeks from an ETF that tracks the S&P 500. The measure of market turbulence known as the VIX slid 16% today, the most in more than a month.
The S&P 500 has advanced in the five days before the vote in 20 of the past 22 presidential election cycles, according to data compiled by Bloomberg and Bespoke Investment Group. While the gauge has climbed an average 1.9% in the run-up to votes going back to 1928, it was down 1.9% in the prior four sessions, with today's the final one before polls open Tuesday morning.
Hedge fund manager David Tepper said he's supporting Clinton for president after initially being open to backing Trump. He said in a CNBC interview on Monday that she will probably be to the right of her party's platform on economic policy. The head of Appaloosa Management also said he'll vote for Republican candidates running for the House and Senate.
"Markets are finally taking a bit of breather, with Clinton's chances going higher," said Christian Stocker, a strategist at UniCredit Bank in Munich, Germany. "This should last until Wednesday, when markets decide what the next direction is. There isn't certainty she'll win, but she is gaining some momentum and at least we got one worry out of the way."
The earnings season is drawing to a close, with about 85% of S&P 500 companies having reported. Of those, 55% beat sales expectations and 76% exceeded profit forecasts. Marriott International and News Corp. are among firms posting results today. Analysts forecast a profit increase of 2.5% for the benchmark's members in the third quarter. If that holds, it will end the longest earnings recession since the financial crisis.
