US stocks drifted Monday ahead of a momentous week full of potential flashpoints, while oil prices climbed and Treasury yields dropped.
- The S&P 500 fell 16.11 points, or 0.3%, to 5,712.69 , even though the majority of stocks within the index rose.
- The Dow Jones Industrial Average fell 257.59 points, or 0.6%, to 41,794.60.
- The Nasdaq composite fell 59.93 points, or 0.3%, to 18,179.98.
Beyond Election Day on Tuesday, the Federal Reserve will also be meeting on interest rates later this week. Investors also hope the Chinese government may announce stimulus for the world's second-largest economy. Crude prices rose after oil-producing nations delayed planned increases to their production.
Intel fell 2.9%, and chemical producer Dow sank 2.1% in their first trading since getting notified that they'll no longer be included in the Dow Jones Industrial Average. The chemical company and the stock index were founded by different Dows. Warren Buffett's Berkshire Hathaway dropped 2.2% after reporting a drop in operating profit for the latest quarter. But the majority of stocks within the S&P 500 rose, including a 2.8% gain for Fox after it reported a stronger profit than expected. That was despite increases in some costs, including for newsgathering at Fox News to cover this election cycle.
Election Day will arrive Tuesday, though its result may not be known for some time as officials count all the votes. That's raised fears about the possibility of sharp swings around the world because markets infamously hate uncertainty. History may be less foreboding. The broad US stock market has historically gone on to rise regardless of which party wins the White House, the AP reports. And in 2020, stocks climbed immediately after Election Day and kept going even after then-President Donald Trump refused to concede and challenged the results, creating plenty of uncertainty. A large part of that rally was due to excitement about the potential for a vaccine for COVID-19.
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"Bottom line—the US election is incredibly important, but the process is likely to be incredibly noisy," according to Michael Zezas, a strategist at Morgan Stanley. For markets, Zezas also points to how prices may have already moved ahead of expected outcomes from the election. A win for Trump could mean US tariffs on Mexican imports, for example, which could hurt the value of the Mexican peso. But the peso has already fallen against the US dollar in recent months, which could limit further moves if a Trump win were actually to happen.
- An investment that's become a barometer in the market for Trump's perceived chances of victory swung sharply on Monday. Trump Media and Technology Group veered between losses and gains through the morning before rising 12.4%.
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