U.S. stock futures moved higher on Monday, gearing up for a positive start to a week of potentially huge market-moving events: the presidential election and the Federal Reserve’s policy decision.
S&P 500 futures () rose about 0.2%, following a comeback to end a losing week. Contracts on the tech-heavy Nasdaq 100 () rose 0.1%, while Dow Jones Industrial Average futures () hovered above the flat line.
A solid earnings season so far and optimism about the rate cut give the market reason to be upbeat ahead of Tuesday’s election, a high-risk event for markets. The new president – whether Kamala Harris or Donald Trump – will set the course for the economy in the years that follow. The neck-and-neck race has investors bracing for volatility on election day itself.
Read more: The Yahoo Finance guide to the presidential election and what it means for your wallet
But with just one session to go, polls showed Harris likely to win Iowa and gain ground elsewhere — a sign that the Democrat has a better chance of winning than Wall Street had calculated. The dollar fell the most in a month as traders unwound their bets on a Trump victory. Government bond yields also fell, with the 10-year benchmark rate (^TNX) falling almost 10 basis points to 4.30%.
Also important is the Fed’s two-day policy meeting, which starts a day later than usual on Wednesday in light of the elections.
Wall Street is confident that Chairman Jerome Powell will usher in a 0.25% rate cut on Thursday, despite signs of persistent inflation and clouded labor market signals. Therefore, the focus is on what the Fed could do at future meetings, with the market now seeing three fewer cuts through the end of 2025 than previously expected.
Read more: What the Fed’s interest rate cut means for bank accounts, CDs, loans and credit cards
At the same time, earnings continue to roll in, with the likes of beleaguered AI server maker Super Micro Computer (SMCI), Arm (ARM) and Qualcomm (QCOM) lining up to report this week. With 70% of the S&P 500 reporting quarterly results, the benchmark index is on track for its fifth straight quarter of earnings growth as it recovers from the 2023 earnings recession.
In other markets, oil prices rose 3% after OPEC+ decided to delay a planned production increase by at least a month, and Iran escalated tensions in the Middle East by warning of a “crushing response” to the attacks by Israel. Brent (BZ=F) crude futures traded above $75 a barrel, while West Texas Intermediate (CL=F) crude changed hands not far from $72.
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Live stock market coverage for Monday, November 4, 2024
