US benchmark equity indexes experienced a downturn after midday Monday as investors anticipated the presidential election and the Federal Reserve's upcoming monetary policy decisions later this week. The Dow Jones Industrial Average decreased by 0.5% to 41,835.8 intraday, while the S&P 500 slipped by 0.1% to 5,724.
The Nasdaq Composite remained relatively stable at 18,243.9. Among various sectors, utilities were the most affected, experiencing the steepest decline, while energy stocks saw the most significant gains. With the US presidential election scheduled for Tuesday, anticipation builds around the outcome's implications for monetary policy.
Following the election, the Federal Open Market Committee is set to commence a two-day meeting on Wednesday, during which a decision on interest rates is expected to be announced on Thursday. Market analysts largely predict that policymakers will reduce the benchmark lending rate by 25 basis points, as highlighted by the CME FedWatch tool. “Given that the meeting will come on the heels of the election, there will likely be questions about its implications,” Macquarie stated in a note to clients on Monday.
“Should Trump emerge as the victor, these would likely focus on the threatened tariffs, fiscal policy, and Fed independence.” In market movements, the US 10-year yield dipped by 4.8 basis points to 4.32% during intraday trading, while the two-year yield decreased by 2.2 basis points to 4.18%. In corporate news, Talen Energy ($TLN) shares dropped 3.5%.
Intel ($INTC) recorded the second-largest decline on both the Nasdaq and the Dow, falling by 2.4%. On a notable note, S&P Global's division, S&P Dow Jones Indices, announced that Nvidia ($NVDA) will replace Intel in the Dow starting November 8, leading Nvidia shares to rise by 2.1% intraday Monday. Salesforce ($CRM) shares experienced a gain of 1.7%, making it the top performer on the Dow, as Evercore ISI revised its price target for the stock to $400 from $300. Additionally, companies such as Palantir Technologies ($PLTR), NXP Semiconductors ($NXPI), American International Group ($AIG), and Illumina ($ILMN) are set to disclose their latest quarterly financial results following Monday's market close. In commodities, West Texas Intermediate crude oil climbed 2.8% to $71.42 a barrel intraday, with price increases attributed to the Organization of the Petroleum Exporting Countries and its allies delaying a planned production hike by one month, according to D.A.
Davidson's note to clients. Gold prices dipped by 0.1% to $2,747.30 per troy ounce, while silver fell 0.2% to $32.78 per ounce..