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The industrial, financial, energy, materials and technology sectors led Wall Street sharply higher on Tuesday. Traders paid close attention to the U.S. presidential election.

Today's Markets

As of 3:20 p.m. ET, the Dow Jones Industrial Average rose 133 points, or 1%, to 13244, the S&P 500 gained 10.9 points, or 0.77%, to 1428 and the Nasdaq Composite climbed 10.8 points, or 0.36%, to 3010.

In a sign of the breadth of the rally, nine of ten S&P 500 sectors were in the green on Tuesday. Volatility slid some 7.4% as tracked by the CBOE's VIX, sometimes referred to as Wall Street's fear gauge. Commodities rallied across the board. 

Election in the Spotlight

Trading desks across the world were fixated on the American presidential election, the results of which are likely to play a big role in shaping the world's leading economy in years to come. Last-minute polling showed President Barack Obama and Mitt Romney locked in a very tight race. 

A significant concern among market participants was also the uncertainty that could be caused by the election dragging out over several days or weeks.

"Election results will come down to voter turnout and, with the polls as close as they are, there is a non-negligible risk of a vote count dragging on beyond tonight," analysts at Nomura warned clients. "Any doubt over the validity of election results ... could worsen tensions ahead of the fiscal cliff debates." 

Analysts at Barclays echoed that sentiment, saying: "The importance of economic policymaking, the significant differences between the two candidates, the closeness of the polls and the result’s possible effect on bond yields make this a particularly important election in terms of potential short-run effects." 

Indeed, the U.S. is barreling toward the so-called fiscal cliff, a painful combination of federal spending cuts and tax hikes that could weigh heavily on economic growth. Political analysts have said that avoiding that outcome, while likely, will require careful stewardship by the White House and in Congress. 

On the economic front, U.K. industrial output slid 1.7% in September from the month before, which was more than double the drop economists expected. Meanwhile, Spanish newspaper El Pais reported that the European Union expects Spain's economy to shrink 1.6% this year compared to Madrid's estimate of 1.5%. 

In corporate news, AOL (AOL) and CVS Caremark (CVS) both posted quarterly earnings that topped expectations on the top and bottom lines. 

Commodity Rally

Oil prices raced higher. The benchmark contract traded in New York jumped $1.52, or 1.8%, to $87.23 a barrel. Wholesale New York Harbor gasoline jumped 2.5% to $2.686 a gallon. 

Gold soared $28.90, or 1.7%, to $1,712 a troy ounce. 

Foreign Markets

The Euro Stoxx 50 gained 0.73% to 2536, the English FTSE 100 rose 0.79% to 5885 and the German DAX climbed 0.7% to 7378. 

In Asia, the Japanese Nikkei 225 fell 0.36% to 8975 and the Chinese Hang Seng dipped 0.28% to 21944.

Follow Adam Samson on Twitter @adamsamson.