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* Banks, construction companies rise before the bell

* Arista climbs as profit tops estimates

* PayPal down as earnings target falls short of expectations

* Futures up: Dow 1.50%, S&P 1.19%, Nasdaq 0.69%

(Adds comment, details; updates prices)

By Medha Singh

Nov 3 (Reuters) - Wall Street's main indexes were set to jump at the open on Tuesday as investors bet on a Joe Biden victory followed by a swift deal on more fiscal stimulus after one of the most divisive presidential races in U.S. history.

After slumping to five-week lows last week, the S&P 500 and the Nasdaq began November on a strong footing as the consistent lead for Democratic presidential nominee Biden in national opinion polls raised hopes of a bigger stimulus package as well as more infrastructure spending post-election.

Democrats are also favored to emerge from 14 hotly contested U.S. Senate races with full control of Congress in Tuesday's election, although final results from at least five of those contests may not be available for days, and in some cases, months.

"Currently, the market is betting on a Biden win," said Christian Stocker, UniCredit's lead equity sector strategist.

"Under a Biden presidency, the U.S. economy should be more supportive for equity markets - an economy with more stimulus programs will be perfect for the outperformance of cyclical sectors."

Shares of big U.S. banks including $Bank of America Corp(BAC-N)$

, Citigroup Inc , JPMorgan Chase & Co and Goldman Sachs Group Inc , which are sensitive to the economic outlook, gained more than 1%, while industrials Caterpillar Inc and Honeywell International Inc rose about 2% in premarket trading.

The CBOE volatility index , investors' fear gauge, retreated for a second day after touching a 20-week high last week on surging coronavirus cases globally.

Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh, said a Biden victory could lead to some inflation, which would be beneficial to banks.

"A Federal Reserve committed to keeping rates lower and yet allowing not a flat curve but one with some steepening to it, and then some inflation and you get yourself a hip hip hooray for banks."

Still, the competition in swing states is seen as close enough that Republican President Donald Trump could still piece together the 270 Electoral College votes he needs to stay in the White House for another four years.

Investors are also bracing for wild market swings in case there is no immediate outcome on Tuesday night due to a protracted ballot count or a disputed result.

The benchmark S&P 500 has surged about 55% since Trump clinched an upset victory in 2016 as lower tax rates under his administration boosted corporate profits.

At 8:23 a.m. ET, Dow e-minis were up 403 points, or 1.5%, S&P 500 e-minis were up 39.25 points, or 1.19%, and Nasdaq 100 e-minis were up 76.25 points, or 0.69%.

Among other movers, Arista Networks Inc jumped 13% after the network-gear maker reported a better-than-expected quarterly profit.

PayPal Holdings Inc dropped 5.5% after it forecast current-quarter profit below expectations.

Later this week, investors will also look to the Federal Reserve's two-day policy meeting and October jobs report.

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(Reporting by Medha Singh in Bengaluru; additional reporting by Sruthi Shankar, Susan Mathew and Noor Hussain Zainab; Editing by Sagarika Jaisinghani and Anil D'Silva)

((Medha.Singh@thomsonreuters.com; within U.S. +1646 223 8780, outside U.S. +91 80 6182 2802; Twitter: ))