By Lisa Pauline Mattackal
(Reuters) -Wall Street futures rose slightly on Monday as traders prepared for an action-packed week in which Americans will elect a new president and the Federal Reserve is likely to cut key interest rates.
A new poll showed Democratic candidate Kamala Harris leading in Iowa ahead of Tuesday’s vote, even as rising bets on a win for Republican candidate Donald Trump in recent weeks had pushed up bond yields, the dollar and bitcoin increased.
Stocks seen as a bet on the former president’s chances of victory fell in premarket trading as a decline in 10-year Treasury yields due to recent high pressure in the broader market eased.
Trump Media & Technology Group fell 7.2% and software developer Phunware that created apps for Trump’s 2020 campaign fell 9.6%.
Betting site PredictIT showed Harris edged past Trump as bets on her stood at 55 cents to 53 cents on the former US president, up from 42 cents to 61 cents a week ago. This is what investors are willing to bet for a chance to win one dollar.
Dow E-minis rose 25 points, or 0.06%, S&P 500 E-minis rose 10 points, or 0.17%, and Nasdaq 100 E-minis rose 20 points, or 0.1%.
The winner of the presidential race may not be known for days after the election ends Tuesday, and could lead to choppy trading as investors wait for clarity on the policy implications.
CBOE’s VIX measure of stock expected volatility is trading at 22.38, well above the 30-day moving average of 19.44. However, it is still well below the range of 31.8 to 41 it was trading in the week leading up to the 2020 election.
“We are quite close to the market’s historic peak… this makes me think that whatever the (election) outcome, the upside will be quite limited,” said Sebastiano Chiodino, head of liability-driven investments at Generali Asset. Management.
Meanwhile, investors remained largely confident of a 25 basis point rate cut by the Fed at its November meeting, with a decision expected on Thursday.
A sharply lower-than-expected October nonfarm payrolls figure on Friday did little to dent expectations about the size of the rate cut.
Wall Street closed higher on Friday, but all three major indexes fell weekly as mixed gains from tech megacaps led to losses at some of Wall Street’s biggest companies.
Chip heavyweight Nvidia rose 2.1% after S&P Dow Jones Indices said Friday the company would replace Intel in the Dow Jones Industrial Average. Intel shares fell 1.8%.
Hotel operator Marriott International lost 3.6% after cutting its 2024 profit forecast due to weak domestic travel demand in the US and China.
