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US stocks fell as investors braced for the US presidential election on Tuesday.
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Kamala Harris has been gaining momentum lately and hitting popular Trump trades in the market.
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Investors will have little time to rest after the vote, with the Fed’s policy meeting starting on Wednesday.
U.S. stocks traded lower on Monday as investors turned their attention to Tuesday’s presidential election.
More than 76 million Americans voted via mail-in ballots or in person, signaling a potential record turnout this year.
After a shocking poll in Iowa showed Kamala Harris leading in the state against Donald Trump this weekend, bets in the race tightened after Trump spent the weeks leading up to the vote well ahead of Harris.
Harris’ momentum in the final days of the election weighed on Trump trading on Monday, with Treasury yields, the US dollar and bitcoin all falling.
For a full look at the implications for the economy and stock market based on who wins the election, read BI’s in-depth analysis on the potential consequences here.
Citi analysts noted Monday that the stock market is no longer behaving as it has in recent election years. Stocks tend to falter amid the uncertainty, but the rally has largely continued in the months leading up to the vote, suggesting investors are more attuned to macroeconomic data and earnings.
“US stocks have been very strong this election cycle compared to the past,” the analysts said. “The current anomaly has less to do with the market pricing in a particular election outcome and more to do with the expectation of continued rate cuts combined with a likely shallower economic slowdown in the US.
After the election, investors will shift their attention to the Federal Reserve. The central bank’s next policy meeting is scheduled for Wednesday and Thursday, with an interest rate decision at 2 p.m. Dutch time (ET) on Thursday.
According to the CME FedWatch Tool, markets see a 96% chance that the Fed will cut rates by 25 basis points.
Here’s where the US indexes stood at 4pm on Monday:
Here’s what else is going on:
