Market News by OnEquity

Presidential election and Federal Reserve meeting send U.S. stock market in turmoil

U.S. stock index futures rose Monday in cautious trading at the start of a week that brings a tight presidential election and a Federal Reserve meeting.

At the start of trading Monday, Dow Jones futures were up nearly 60 points, or about 0.1%, S&P 500 futures were up 12 points, or about 0.2%, and Nasdaq 100 futures were also up 12 points, or 0.2%.

Wall Street indexes booked losses of about 1% to #% the previous week, following a series of mixed results from large technology stocks.

Although September quarter earnings mostly beat estimates, the bleak outlook for several major stocks such as Microsoft (MSFT) and Apple (AAPL), in addition to estimates of higher capital spending, weighed on the major tech stocks.

Trump and Harris line up for a tight presidential race
Investors were on edge ahead of Tuesday’s scheduled presidential election as recent polls indicated a tight race between candidates Donald Trump and Kamala Harris.

Recent rises in the dollar and Treasury yields revealed that some investors were positioning positively for a Trump victory, which is believed to give room for more inflationary policies.

Analysts point out that the outcome could have a significant impact on market performance, especially in the high-tech sector.

Specifically, according to Wedbush analysts, a likely Trump victory would be generating concern among tech investors globally in the wake of a likely escalation of the U.S.-China tech conflict along with rising tariffs.

“A major shift in tariffs and a tougher stance toward China we believe would significantly impact supply chain, Nvidia (NASDAQ:NVDA) (NASDAQ:NVDA), Beijing’s retaliatory impacts on Apple/Tesla likely, and slow the pace of the AI revolution,” analysts led by Dan Ives state in a note.

Earnings season continues this week, with prints from Palantir Technologies (PLTR), Vertex Pharmaceuticals (VRTX) and Diamondback Energy (FANG) scheduled for Monday.

About one-fifth of the companies in the benchmark S&P 500 index will report their latest quarterly results this week.

Fed poised to cut interest rates
This week, attention will also be focused on the Federal Reserve’s meeting, at which the central bank is expected to cut interest rates by 25 basis points, following the 50 basis point cut in September.

Markets will be awaiting any comments from the Fed on its plans for future rate cuts, especially in light of recent data revealing the resilience of the U.S. economy and the tightness of inflation, which reduces estimates for rate cuts.

Although it is unlikely that Fed Chairman Jerome Powell will commit to any fixed pace of monetary easing, as the Fed has so far maintained a data-driven policy approach.

Still, the meeting comes after Friday’s nonfarm payroll data revealed that job growth slowed sharply in October, with a downward revision to the reading for the past two months, seemingly a sign that the labor market was cooling.

Oil prices soar after OPEC decision
Oil prices rose sharply on Monday after OPEC+, a group of producing countries, delayed by about a month an estimated production increase for December in the wake of recent pressure on prices from weak demand.

The Organization of the Petroleum Exporting Countries along with its allies, known as OPEC+, made the announcement on Sunday that they will again delay by at least a month an estimated production increase of 180,000 barrels per day.

It is the second time a cut of 2.2 million barrels a day has been extended and may suggest producer countries are concerned about demand around the world.