Election Jitters and Fed Watch: US Stocks Dip as Markets Brace for Change
Staff Editor US Stocks Dip as Election Looms, Investors Eye Fed Meeting
US stocks experienced a decline on Monday as investors shifted their focus to the upcoming presidential election, with Democratic candidate Kamala Harris gaining momentum in recent polls. The market’s attention is expected to quickly pivot to the Federal Reserve’s policy meeting following the election results.
Early voting data indicates a potential record turnout, with over 76 million Americans having already cast their ballots through early voting or mail-in options. A surprising Iowa poll showing Harris leading against incumbent Donald Trump has tightened the race, impacting popular Trump trades in the market.
The shift in political momentum has led to declines in Treasury yields, the US dollar, and bitcoin. Analysts note that the stock market’s behavior has been unusual compared to past election years, with continued rallies attributed to expectations of ongoing interest rate cuts and a mild US economic slowdown.
Following the election, investors will turn their attention to the Federal Reserve’s policy meeting scheduled for Wednesday and Thursday. An interest rate decision is expected at 2 p.m. ET on Thursday, with markets predicting a 96% chance of a 25 basis point rate cut, according to the CME FedWatch Tool.
At the close of trading, the S&P 500 fell 0.28% to 5,712.73, while the Dow Jones Industrial Average dropped 0.61% to 41,794.60. The Nasdaq composite declined 0.33% to 18,179.98.
In other market developments, Berkshire Hathaway reduced its stake in Apple, now holding $325 billion in cash. Analysts suggest that stocks may remain stagnant for the rest of the year due to Fed uncertainty and US debt concerns. Meanwhile, a crypto PAC has raised significant funds for the 2026 midterm elections, and US oil production has reached a record high, complicating matters for crude-exporting countries.
In a notable index change, Nvidia is set to replace Intel in the Dow Jones Industrial Average, while Sherwin-Williams will replace Dow Inc.
Commodities saw mixed performance, with West Texas Intermediate crude oil increasing by 2.96% to $71.55 a barrel and Brent crude rising by 2.76% to $75.12 a barrel. Gold decreased slightly by 0.08% to $2,746.90 an ounce.
In the bond market, the 10-year Treasury yield fell by 8 basis points to 4.314%. Cryptocurrency markets also felt the impact, with Bitcoin dropping by 1.64% to $67,617.
As the election approaches and the Federal Reserve meeting looms, investors remain cautious, closely monitoring political developments and economic indicators for potential market impacts.
