US stocks slide ahead of presidential election

US stocks on Monday had a small slide ahead of the 2024 presidential election, but other markets are already moving higher.

US stocks held up well, with the S&P 500 near last month’s record high. The Dow Jones was down 135 points, or 0.3 percent, and the Nasdaq was down 0.1 percent.

How Elections Will Affect the Market

Marriott International shares fell 3.1 percent following a weaker-than-expected quarterly earnings report. On the other hand, Fox Corp. it increased 3.9 percent after beating estimates for profits, work done and amid rising costs related to current-season voting requirements at Fox News.

Markets are facing a key Election Day on Tuesday, where Vice President Kamala Harris faces off against former President Donald Trump, but investors may need to brace for an unexpected number, fueling concerns over uncertainty. in the long run – something that Wall Street tends to fear.

However, historically, US markets tend to rise regardless of the presidential winner. In the 2020 election, US stocks rose immediately after Election Day and continued to climb higher even after Trump denied the results. Much of that post-election rally was also fueled by optimism about an upcoming COVID-19 vaccine that promised to revive the stalled global economy.

What Strategists Say

“The bottom line – the US election is very important, but the process may be surprisingly noisy,” Michael Zezas, a strategist at Morgan Stanley, told The Associated Press.

Zezas noted that prices are likely to reflect the likely outcome of the election as investors carefully consider potential policy implications. If Trump secures a victory, for example, tariffs on Mexican imports could return, but the Mexican peso has gained against the U.S. dollar in recent months, likely limiting further declines if such policies can be realized.

Trump’s success would not shock markets this time as it did in 2016, when the Treasury expressed hope for tax cuts to boost US economic growth despite concerns about rising debt.

In recent weeks, Treasury yields have also risen, partly in response to strong economic recovery reports and advice from some markets betting on a Trump victory. However, on Monday, yields fell, with the yield on the 10-year Treasury falling to 4.27 percent from 4.38 percent last Friday.

What do oil prices look like?

Oil prices are rising after Saudi Arabia and other key producers announced a delay in planned production increases. US crude prices rose 2.6 percent to $71.29 a barrel, while Brent crude rose similarly to $74.98. Treasury yields, often a gauge of market sentiment, fell as the yield on the 10-year Treasury fell to 4.27 percent from 4.38 percent on Friday.

Across the US, China’s Standing Committee of the National People’s Congress convened this week, an opportunity to showcase fiscal performance to combat two quarters of sluggish growth. Meanwhile, the Federal Reserve is expected to cut its interest rate for the second time in a row, with the stock market following closely behind.

As oil and Treasury yields react, investors are bracing for a tough week ahead.

This article includes a report from The Associated Press.