U.S. equity indexes experienced a downturn as government bond yields and the dollar declined, highlighted by a significant poll that raised doubts about the prevailing narrative suggesting a potential return of former President Donald Trump to The White House in 2024. The S&P 500 experienced a minor decrease of less than 0.1%, settling at 5,725.1 after midday on Monday.
The Dow Jones Industrial Average dropped 0.4% to 41,866.3, while the Nasdaq Composite retracted slightly, also by less than 0.1%, reaching 18,233.7. Within sector movements, energy emerged as a leading gainer during the intraday session, closely followed by real estate, whereas utilities and communication services faced notable declines. The U.S.
Dollar index fell 0.4% to 103.85 by early Monday afternoon, relinquishing some of the gains acquired during the Trump trade. In accordance with this trend, a majority of U.S. Treasury yields experienced decreases during the intraday period, with the 10-year yield slipping 6.6 basis points to 4.33%, and the two-year rate dropping 3.1 basis points to 4.19%. A much-anticipated Selzer De Moines Register Iowa poll, released on Saturday, revealed Vice President Kamala Harris leading by three points in a typically pro-Trump state.
This finding contrasts sharply with polling averages that had Trump ahead by nine points, according to a note from Deutsche Bank. "Many political commentators had been waiting for this poll due to its reliable track record, with FiveThirtyEight calling Selzer 'the best pollster in politics'," remarked Jim Reid, head of global fundamental credit strategy at Deutsche Bank, in the note. As of last weekend, Trump was evaluated to have a 61% chance of winning according to PredictIt, compared to 52% on Friday and 48% on Saturday, recovering slightly to 51% on Monday morning, as per the Deutsche Bank note.
On Polymarket.com, Trump’s probability peaked at 67% on Wednesday but dropped to approximately 59% by Friday. Over the weekend, it further declined to 53%, before creeping up to 56% early Monday. The chances of a Republican sweep have shifted to 39%, a drop from a high of 49% last Tuesday, the note added. Shifting focus to economic indicators, new orders for U.S.
factory goods dipped 0.5% in September, aligning with expectations in a survey by Bloomberg, following a revised decrease of 0.8% in August. Notably, when excluding a 3.1% drop in transportation orders, new orders would have seen a slight increase of 0.1%, despite an earlier 0.2% decline in August. In corporate updates, shares of Nvidia rose 1.7% after S&P Dow Jones Indices announced that Nvidia would replace Intel in the Dow Jones Industrial Average effective Friday.
Conversely, Intel’s shares fell 3.1% intraday, making it one of the poorest performers on the Dow, Nasdaq, and S&P 500 indexes. The price of West Texas Intermediate crude oil soared 3% to $71.25 a barrel. OPEC+, the leading global coalition of crude oil producers, agreed on Sunday to postpone the reintroduction of 2.2 million barrels per day of production cuts by a month, rescheduling to January, marking a second delay from the original October timeline. "Given the persistent uncertainty surrounding the demand outlook for 2025, this decision aligns with the leadership's commitment made in June to remain cautious about production decisions and avoid sudden market shocks," stated Helima Croft, head of Global Commodity Strategy at RBC Capital Markets, in a note.
"Concerns around OPEC potentially oversupplying a delicate market have significantly affected sentiment." Meanwhile, gold experienced a slight dip of 0.2%, pricing in at $2,744.01 an ounce, while silver saw a slight decrease of 0.1%, coming in at $32.58 an ounce..