US equity indexes experienced a downturn amid a decline in government bond yields and the dollar as a significant poll cast doubt on the prevalent narrative regarding the 2024 elections potentially favoring former President Donald Trump. The S&P 500 saw a minimal decrease of less than 0.1%, settling at 5,725.1 by midday Monday.
The Dow Jones Industrial Average dropped 0.4% to 41,866.3, while the Nasdaq Composite also decreased slightly to 18,233.7. Energy emerged as the leading sector for gains, alongside real estate, whereas utilities and communication services led the losses. The US Dollar index fell by 0.4%, reaching 103.85 early Monday afternoon, relinquishing some of its gains associated with the Trump trade.
Concurrently, US Treasury yields mostly declined, with the 10-year yield dropping 6.6 basis points to 4.33% and the two-year rate falling 3.1 basis points to 4.19%. A "highly anticipated" Selzer De Moines Register Iowa poll released over the weekend indicated that Vice President Kamala Harris held a three-point lead in a state that had shown polling averages with Trump ahead by nine points previously, as noted in a report from Deutsche Bank.
Jim Reid, head of the global fundamental credit strategy at Deutsche Bank, remarked, "Many political commentators had been waiting for this poll as it has one of the best track records amongst pollsters, with FiveThirtyEight describing Selzer as 'the best pollster in politics.'" This past weekend, Trump’s winning probability was recorded at 61% on PredictIt, down from 52% on Friday and 48% on Saturday, before slightly bouncing back to 51% by Monday morning.
On Polymarket.com, Trump peaked at 67% on Wednesday; however, this probability declined to around 59% by Friday, further dropping to 53% over the weekend before rising again to 56% early Monday. The likelihood of a Republican sweep is currently at 39%, down from 49% last Tuesday, the Deutsche Bank report indicated. In economic developments, new orders for US factory goods fell by 0.5% in September, aligning with expectations from a Bloomberg survey, and followed a revised 0.8% decrease in August.
Excluding a notable 3.1% decline in transportation orders, new orders would have reflected a 0.1% increase after a 0.2% fall in August. In corporate updates, Nvidia's shares rose by 1.7% following the announcement from S&P Dow Jones Indices that Nvidia would replace Intel in the Dow Jones Industrial Average effective Friday.
Conversely, Intel's shares plummeted by 3.1% intraday, marking it as one of the worst performers across the Dow, Nasdaq, and S&P 500 indices. West Texas Intermediate crude oil price surged by 3%, reaching $71.25 a barrel. OPEC+, the largest cartel of crude oil producers globally, decided over the weekend to postpone its plan to reinstate 2.2 million barrels per day of production cuts by a month to January, marking a second deferral from the initial October target. Helima Croft, head of Global Commodity Strategy at RBC Capital Markets, noted, "With continued uncertainty around 2025's demand outlook, the pause decision is consistent with the leadership's June pledge to remain prudent about production decisions and to avoid sudden shocks." Concerns regarding potential oversupply from OPEC in a fragile market have been significantly dampening sentiment. Additionally, gold prices dipped by 0.2% to $2,744.01 per ounce, while silver dropped by 0.1% to $32.58 per ounce..