Wall St struggles to gain as uncertainty around U.S. election grows
By Lisa Pauline Mattackal
(Reuters) - U.S. stock indexes slipped in choppy trading on Monday, as investors braced for a pivotal week for global markets in which Americans 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 dollar, bond yields and bitcoin.
Harris' odds have improved on several betting sites, an election indicator that many market participants keep a close watch.
Stocks turned lower despite a drop in the yield for the benchmark U.S. 10-year Treasury, with volatile trading expected in the run-up to the election outcome as investors await clarity on the policy implications.
"It's a bit of calm before the storm this week ... the bond market may be fading a little bit from the highs last week on some of the new poll numbers coming out, suggesting a tighter race," said Adam Turnquist, chief technical strategist for LPL Financial (NASDAQ:LPLA ).
"The playbooks of the 2016 and 2020 (elections) might be thrown out the window... what dictates the level of volatility will be when we get results."
CBOE's VIX measure of expected equity volatility is trading at 22.54, well above its 30-day moving average of 19.45.
Stocks viewed as bets on a Trump win also jumped between losses and gains. Trump Media & Technology Group was last up 1.4%.
Lower bond yields boosted rate-sensitive small-cap stocks, with the Russell 2000 gaining 0.5%.
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 397.83 points, or 0.95%, to 41,654.14, the S&P 500 lost 27.52 points, or 0.48%, to 5,701.28 and the Nasdaq Composite lost 73.98 points, or 0.41%, to 18,165.94.
An index of energy stocks rose 1.4% as oil prices rose after OPEC+ delayed plans to increase output. [O/R]
Most megacap stocks lost ground, with Tesla (NASDAQ:TSLA ) dropping 1.8% as the EV maker's China-made vehicle sales fell in October.
However, chip heavyweight Nvidia (NASDAQ:NVDA ) rose 1.6%, after S&P Dow Jones Indices said on Friday the company would replace Intel (NASDAQ:INTC ) in the Dow Jones Industrial Average. Intel's 4.3% slide weighed on the Dow.
Hotel operator Marriott International (NASDAQ:MAR ) lost 2% after cutting its 2024 profit forecast on weak domestic travel demand in the U.S. and China.
Constellation Energy was the biggest loser on the S&P 500, slumping 11.1% after its results. Its losses dragged the Utilities sector.
Advancing issues outnumbered decliners by a 1.64-to-1 ratio on the NYSE and by a 1.1-to-1 ratio on the Nasdaq.
The S&P 500 posted 10 new 52-week highs and four new lows while the Nasdaq Composite recorded 56 new highs and 100 new lows.
Source: Investing.com
