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U.S. equity futures edge higher Monday, while the dollar slumped lower and Treasury yields tumbled, as investors braced for a wild week on Wall Street with presidential elections, a key Federal Reserve rate decision and a host of corporate earnings.
Stocks ended higher on Friday, but closed out the week in the red, following a mixed slate of megacap tech earnings and a weaker-than-expected October jobs report that was heavily influenced by late-season hurricanes and a crippling strike at planemaker Boeing (BA) .
This week’s focus, however, is expected to fall firmly onto Tuesday’s national election, which also includes 34 senate seats, as well as the regular two year turnover of the House of Representatives, that will have a crucial impact on any policies that either Vice President Kamala Harris or former President Donald Trump will attempt to bring to Congress.
WELLS: “.. polling suggests Senate control is more predictable this year – and the outcome potentially more impactful.
“.. Across the last 38 two-year election cycles, the $SPX two-year total returns averaged ~27%. When the GOP had Senate control, this figure was ~36%; when… pic.twitter.com/GKpPmbYA4k
— Carl Quintanilla (@carlquintanilla) November 4, 2024
Polls continue to suggest a dead heat between the two candidates, but a series of weekend surveys, including a surprise result from a respected pollster in Iowa, suggests some 11th-hour momentum for Harris.
That’s adding to some reversal of last month’s ‘Trump trade’, putting downward pressure on the dollar, which was marked 0.6% lower against a basket of its global peers, as well as Treasury bond yields, which pushed 10-year notes down to 10 basis points 4.297% in overnight trading.
Trump Media & Technology (DJT) shares, meanwhile, fell another 6% in heavy premarket volume, following on from last week’s 27.5% slump, as traders pared bets on a victory for the former president.
Tuesday’s presidential election will capture the attention of markets around the world, but a full result may not be available until later in the week.
Broader markets, however, look set for a cautious open ahead of tomorrow’s election and a key Fed policy meeting, slated one day later than usual on Thursday.
Last week’s inflation and jobs data have had little impact on bets for a quarter point rate cut this month, which would take the Fed Funds rate to between 4.5% and 4.75%, with the odds of a follow-on reduction in December pegged at 82% according to the CME Group’s FedWatch.
On Wall Street, futures contracts tied to the S&P 500, which remains 20.1% higher for the year, are priced for a 10 point opening bell gain while those linked to the Dow Jones Industrial Average suggest a 25 point bump.
The tech-focused Nasdaq, which is up 21.5% for the year, is pried for a modest 35 point gain.
Related: Nvidia to reap billions in big tech AI spending
Stocks on the move include Nvidia (NVDA) , which was marked 2.2% higher in premarket following news late Friday that the AI chipmaker will replace Intel (INTC) in the Dow later this month.
More Wall Street Analysts:
Analysts update Meta stock price target with Q3 earnings in focusAnalysts update outlook for Nvidia’s Blackwell chips amid AI boomAnalyst reboots Reddit stock price target ahead of earnings
In overseas markets, stocks were broadly higher modest gains in Europe, including a 0.3% gain for the Stoxx 600, and a 0.62% advance for the MSCI ex-Japan benchmark in Asia. Japan’s Nikkei 225 remained closed for the country’s annual Culture Day observance.
Related: Veteran fund manager sees world of pain coming for stocks
