Wall Street ended lower on Monday in a choppy trading session as investors looked forward to the U.S. presidential election and the Federal Reserve’s decision on rate cut after its policy meeting this week. All three major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) declined 0.6% or 257.59 points, to finish at 41794.60 points.
The S&P 500 fell 0.3% or 16.11 points, to end at 5,7162.69 points. Utilities and financial stocks were the worst performers.
The Utilities Select Sector SPDR (XLU) lost 1.2%. The Financials Select Sector SPDR (XLF) declined 0.8%. However, the Real Estate Select Sector SPDR (XLRE) gained 1.1%. Seven of the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq shed 0.3% or 59.93 points to close at 18,179.98 points.
The fear-gauge CBOE Volatility Index (VIX) was up 0.46% to 21.98. Advancers outnumbered decliners on the NYSE by a 1.37-to-1 ratio. On the Nasdaq, a 1.01-to-1 ratio favored declining issues. A total of 11.31 billion shares were traded on Monday, lower than the last 20-session average of 11.71 billion.
Choppy Trading Ahead of the U.S. Presidential Election
Trading was choppy throughout Monday as investors geared up for the U.S. presidential election. The S&P 500 and Nasdaq oscillated between gains and losses, while the Dow at one point dropped more than 400 points.
The result of Tuesday’s election is likely to give a clear picture of how markets will move for the remainder of the year. Polls show both Vice President Kamala Harris and former President Donald Trump having a neck-to-neck fight.
The close fight between the two candidates could take days to determine the winner.
A poll on Saturday showed that Harris leading Trump improved in the conservative Iowa, which led to a drop in the U.S. dollar. The 30-year Treasury yield dropped by the most in two months. The 30-year yield declined by 6.4 basis points to 4.495%, its biggest one-day decline since Sept. 3.
Monday’s choppy trading saw stocks taking a beating on Monday. NVIDIA Corporation’s (NVDA) stocks had a brief rally that somewhat helped the broader market pare some of the earlier losses. However, its stock still settled well off its session highs.
Shares of NVIDIA gained 0.5%. NVIDIA carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Investors Look Forward to Fed’s Policy Meeting
Investors are also looking forward to the Federal Reserve’s two-day policy meeting scheduled for Nov. 6-7. The Federal Reserve reduced interest rates for the first time since March 2020 by 50 basis points in its September policy meeting.
Data released last week showed that the U.S. economy added a dismal 12,000 jobs in October, which has almost assured of another rate cut this week. Markets are pricing in a 25 basis point rate cut after the Fed’s meeting. The CME's FedWatch Tool shows stat markets are pricing in a 98% chance of a cut this week.
Economic Data
In economic data released on Monday, the Commerce Department said that factory orders fell 0.5% in September, the second month in a row.
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