Market Watch: Stocks Slip Ahead of Election and Fed Decision
As the presidential election and Federal Reserve policy meeting loom, US stocks took a dip on Monday. The S&P 500 slipped 0.2%, while the tech-heavy Nasdaq Composite and Dow Jones Industrial Average also fell, by 0.2% and 0.5%, respectively.
Election Jitters
Investors are bracing for volatility on Election Day itself, as the neck-and-neck race between Kamala Harris and Donald Trump has Wall Street on edge. Weekend polls showed Harris with a surprise lead in Iowa and gaining ground elsewhere, causing traders to recalculate their bets on a Trump victory. The dollar dropped by the most in a month, while Treasury yields also retreated.
Fed Rate Cut Expectations
The Federal Reserve’s two-day policy meeting, starting on Wednesday, is also weighing on investors’ minds. Despite signs of stubborn inflation and muddied job market signals, Wall Street expects Chair Jerome Powell to usher in a 0.25% rate cut on Thursday. However, the focus is on what action the Fed might take at future meetings, with the market now seeing three fewer cuts through the end of 2025 than previously expected.
Oil Prices Jump
Oil prices surged nearly 3% on Monday after OPEC+, a group of major oil producers, decided to delay a planned hike in output by at least a month. Energy stocks outperformed, with crude futures gaining more than 2% following the decision.
Stock Market Winners and Losers
Nvidia stock rose 2.5% on Monday, reaching a $3.40 trillion market cap, as analysts pointed to rising chip sales and mounting spending on AI infrastructure. Peloton shares rose 9% after Bank of America analysts upgraded the stock to a Buy from Neutral amid optimism over the fitness equipment maker’s new leadership. On the other hand, Constellation Energy stock fell as much as 12% early Monday amid a broader decline in nuclear power stocks following the US government’s rejection of another Big Tech nuclear power agreement.
Housing Market Concerns
A new report showed that first-time homebuyers made up 24% of all buyers this year, marking the lowest share since 1981. High home prices, elevated borrowing costs, and low inventory have hammered affordability over the past year, leaving many first-time buyers on the fence about purchasing a home.
Economic Data and Earnings
Factory orders and durable goods orders for September will be released today, while earnings reports are expected from Berkshire Hathaway, Cleveland-Cliffs, Constellation Energy, and others.
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