On the final day before the U.S. presidential election, stock markets slipped as investors turned cautious, shifting focus to safer assets in response to the unpredictable political climate. Dow Jones Industrial Average shed 175 points, or 0.4%, while S&P 500 and Nasdaq Composite both posted similar declines of 0.25% and 0.6%, respectively. This drop followed increased demand for U.S. Treasury bonds, indicating a “risk-off” sentiment among traders.
Nvidia Gains Amid Dow Inclusion
Nvidia Corp., one of the standout performers of 2024 with a remarkable 176% increase year to date, saw a modest rise of 1% as S&P Dow Jones Indices announced its inclusion in the Dow Jones Industrial Average. Nvidia’s addition underscores its strong position in the artificial intelligence space, especially as its primary competitor, Intel, has struggled. Intel’s stock value has dropped over 50% this year, failing to capture momentum in the AI sector.
Election Uncertainty and Market Reactions
close race between former President Donald Trump and Vice President Kamala Harris has heightened market volatility, with NBC News reporting a “deadlocked” scenario. The outcome of the election—and the party that ultimately controls Congress—will likely influence fiscal policies and economic direction. While a split Congress could maintain the status quo, a party sweep may usher in new policies on spending, regulation, or taxes.
According to Michael Zezas, Morgan Stanley strategist, “U.S. election is incredibly important, but the process is likely to be incredibly noisy. Some patience, and a plan, can make the difference between navigating noise and getting lost in it.”
Fed Rate Decision Looms
Alongside election concerns, markets are also awaiting the Federal Reserve’s upcoming rate decision, with a 96% probability of a rate cut predicted by CME Group’s FedWatch tool. This follows a 50-basis-point cut in September. Investors are paying close attention to Fed Chair Jerome Powell’s commentary for insights on potential future rate adjustments, with interest rates and inflation remaining central means for the U.S. economy.
Or Market Movers
- Charter Communications saw a 1% increase following an upgrade to a “buy” rating by Bank of America Securities, based on its better-than-expected third-quarter results and improving broadband subscriber trends.
- Peloton surged nearly 6% in premarket trading after Bank of America raised its rating to buy, citing growth potential under incoming CEO Peter Stern.
- Marriott International shares fell over 2% in premarket trading following a miss on earnings expectations. Despite a revenue increase, the company’s net income declined compared to last year.
With the election, the Fed’s rate decision, and quarterly earnings influencing markets, the outcome of Tuesday’s vote may shape how investors position themselves through the remainder of 2024.