Wall St flat as uncertainty around US election grows
US stock indexes are trading flat to lower as investors braced for a pivotal week for global markets in which the United States will elect a new president and the Federal Reserve is likely to cut its benchmark policy rate.
Caution prevailed as the winner of the tightly contested election between Democratic candidate Kamala Harris and Republican Donald Trump might not be known for days after the voting ends on Tuesday.
Some of the so-called “Trump trades” lost ground after a recent poll showed Harris leading in Iowa, triggering a retreat in US dollar, bond yields and bitcoin.
Harris’ odds have improved on several betting sites, an election indicator that many market participants keep a close watch.
“This is the biggest event for markets for the year … but we think it’s wisest not to make big (investment) bets,” said Michael Reynolds, vice president, Investment Strategy at Glenmede.
Choppy trading is likely in the wait for the election outcome and due to a lack of clarity on the policy implications.
“We’re bracing for volatility and maybe looking for some opportunities around the edges.”
CBOE’s VIX measure of expected equity volatility is trading at 22.39, well above its 30-day moving average of 19.44.
It is, however, still significantly below the range of 31.8 to 41 it was trading at in the week ahead of the 2020 election.
Stocks viewed as bets on a Trump win slipped.
Trump Media & Technology Group was last down 2.0 per cent and software developer Phunware that designed an app for Trump’s campaign in 2020 fell 8.3 per cent.
Investors, meanwhile, remained largely sure of a 25 basis point interest rate cut by the Fed in its November meeting, whose decision is expected on Thursday.
The Dow Jones Industrial Average fell 108.63 points, or 0.26 per cent, to 41,943.56, the S&P 500 gained 2.54 points, or 0.04 per cent, to 5,731.34 and the Nasdaq Composite lost 20.00 points, or 0.11 per cent, to 18,219.92.
An index of energy stocks rose 1.6 per cent as oil prices rose more than 2.0 per cent after OPEC+ delayed plans to increase output.
All three major indexes had declined for the week on Friday, as mixed earnings from technology megacaps led to losses in some of Wall Street’s largest companies.
Most megacap stocks lost ground on Monday, with Tesla dropping 2.4 per cent as the EV maker’s China-made vehicle sales fell in October.
However, chip heavyweight Nvidia rose 1.1 per cent after S&P Dow Jones Indices said on Friday the company would replace Intel in the Dow Jones Industrial Average.
Intel shares tumbled 3.0 per cent.
Hotel operator Marriott International lost 2.0 per cent after cutting its 2024 profit forecast on weak domestic travel demand in the US and China.
Constellation Energy was the biggest loser on the S&P 500, slumping 12.4 per cent after its results.
Its losses dragged the Utilities sector.
On the data front, US factory orders declined 0.5 per cent in September on a monthly basis – as expected.
Advancing issues outnumbered decliners by a 2.26-to-1 ratio on the NYSE while declining issues outnumbered advancers by a 1.03-to-1 ratio on the Nasdaq.
The S&P 500 posted seven new 52-week highs and four new lows while the Nasdaq Composite recorded 32 new highs and 83 new lows.
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