Wall St struggles due to election uncertainty, potential Fed rate cut

From Investing.com: 2024-11-04 12:21:48

U.S. stock indexes dipped on Monday as investors prepared for a week marked by the presidential election and a potential Fed rate cut. The election outcome remains uncertain, with Kamala Harris leading in Iowa polls. Stocks wavered despite dropping bond yields, with volatility expected until results are clearer.

Market indicators suggest Harris’ odds have improved, impacting “Trump trades” like the dollar, bond yields, and bitcoin. The bond market has seen some pullback due to tighter race indications from recent polls. Investors are bracing for potential policy changes based on the election outcome and remain cautious.

Expected equity volatility is high ahead of the election, with CBOE’s measure at 22.54, above its 30-day average. Stocks tied to a potential Trump win fluctuated, with Trump Media & Technology Group up 1.4%. Small-cap stocks benefited from lower bond yields, with the Russell 2000 gaining 0.5%.

Investors anticipate a 25 basis point interest-rate cut by the Fed in November. U.S. stock indexes closed lower, with the Dow down 397.83 points, the S&P 500 losing 27.52 points, and the Nasdaq dropping 73.98 points. Energy stocks rose as oil prices increased after OPEC+ delayed output plans.

Tesla shares fell 1.8% after a drop in China-made vehicle sales, while Nvidia rose 1.6% on news of its inclusion in the Dow Jones Industrial Average. Intel’s 4.3% decline weighed on the Dow. Marriott International lost 2% after cutting profit forecasts, while Constellation Energy slumped 11.1% on weak results, impacting the Utilities sector.

Advancing issues surpassed decliners on the NYSE and Nasdaq, with the S&P 500 seeing new highs and lows. The Nasdaq Composite recorded numerous new highs and lows, reflecting ongoing market volatility.



Read more at Investing.com: Wall St struggles to gain as uncertainty around U.S. election grows By Reuters