The US stock market displayed a cautious approach on Monday, struggling to gain momentum as investors anticipated the pivotal Election Day on Tuesday. The close race between Vice President Kamala Harris and former President Donald Trump has injected a significant dose of uncertainty into the market, as investors weigh the potential implications of different policy directions.
According to the New York Times national polling average, Harris holds a narrow 1-point lead over Trump, with a 4-point lead among likely voters nationally, based on the latest PBS News/NPR/Marist poll. However, betting markets, as tracked by the CFTC-regulated Kalshi, present a different picture, favoring a Trump victory with a 53% chance. It’s worth noting that these odds are subject to fluctuation, particularly influenced by large-scale bets, known as “whale” bets. One notable example is a bettor on Polymarket who wagered as much as $43 million on a Trump win.
The close contest has also raised eyebrows among political analysts. Nate Cohn, the chief political analyst for the New York Times, remarked, “Neither candidate holds a meaningful edge in enough states to win 270 electoral votes. In the history of modern polling, there’s never been a race where the final polls showed such a close contest.”
Reflecting the uncertainty, the S&P 500 dipped by 0.2%, while the Dow Jones Industrial Average dropped 0.6%, reaching its lowest intraday level since mid-September. However, small-cap stocks in the Russell 2000 index bucked the trend, showing a 1% increase. The tech-heavy Nasdaq 100 also retreated, falling below the 20,000 mark.
Treasury yields declined by nearly 10 basis points as investors scaled back positions associated with Trump’s potentially inflationary policies, including high tariffs and expansive fiscal measures. The dollar also weakened, depreciating by 0.5%.
The rising likelihood of a Harris victory sparked optimism in the solar and renewable energy sectors. The Invesco Solar ETF (TAN) climbed 3.6%. Oil and gas stocks also benefited from a surge in crude prices, which rose 3% after OPEC+ postponed an anticipated production hike. Exxon Mobil Corp. (XOM) experienced a significant jump of 3%, marking its largest single-day gain since late June.
Gold remained steady at $2,740, while Bitcoin (BTC/USD) declined by over 1%, dipping below $68,000.
Monday’s Performance in Major US Indices and ETFs
| Index/ETF | Price | 1-day %chg |
|—|—|—|
| Russell 2000 | 2,230.95 | 1.0% |
| S&P 500 | 5,715.31 | -0.2% |
| Nasdaq 100 | 19,978.22 | -0.3% |
| Dow Jones | 41,807.92 | -0.6% |
Notable Stock Movers
Stocks reacting to earnings reports included:
* Zoetis Inc. (ZTS), down 3.9%
* Constellation Energy Corp. (CEG), down 10.5%
* Marriott International (MAR), down 1.8%
* Fidelity National Information Services, Inc. (FIS), down 0.4%
* Public Service Enterprise Group Inc. (PEG), down 5.9%
* TPG Inc. (TPG), down 5.5%
* Fox Corp. (FOX), up 3.7%
* YUM China Holdings (YUMC), up 7.9%
* Loews Corp. (L), down 4.8%
Stocks scheduled to release earnings after the close include:
* Vertex Pharmaceuticals Inc. (VRTX)
* Palantir Technologies Inc. (PLTR)
* NXP Semiconductors NV (NXPI)
* Diamondback Energy Inc. (FANG)
* American International Group Inc. (AIG)
* Illumina Inc. (ILMN)
* Hologic Inc. (HOLX)
* Astera Labs Inc. (ALAB)
The stock market’s performance on Monday reflects the heightened uncertainty surrounding the upcoming election and its potential impact on economic policies. Investors are closely watching the race, as the outcome could significantly influence sectors, from energy and tech to financial markets. With the election just a day away, volatility is expected to continue, making it crucial for investors to stay informed and adapt their strategies accordingly.
