Wall Street is reeling ahead of Election Day, as oil and key commodities jump
New York – US stocks drifted higher on Monday ahead of a key week full of potential data, as oil prices rose and Treasury yields fell.
The S&P 500 was down 0.1% in late trade but still near its record high set last month. The Dow Jones Industrial Average was down 228 points, or 0.5%, with about an hour left in trading, and the Nasdaq composite was down 0.1%.
Intel fell 2.6%, and the chemical maker Dow sank 2.4% in their first trade since they were informed that they will no longer be included in the Dow Jones Industrial Average. Warren Buffett’s Berkshire Hathaway fell 2.2% after reporting a drop in operating profit for the latest quarter.
But most stocks in the S&P 500 rose, including a 2.3% gain for Fox after it reported a stronger-than-expected profit. This happened despite an increase in other expenses, including news gathering at Fox News to cover this election cycle.
Election Day will arrive on Tuesday, although the outcome may not be known for some time as officials count all the votes. That has raised fears about the potential for volatility around the world because markets hate uncertainty.
History may not be so scary. The U.S. stock market continued to rise regardless of which party wins the White House. And in 2020, American stocks rose immediately after Election Day and continued even after former President Donald Trump refused to acknowledge and challenge the results, causing much uncertainty. A large part of that rally was due to excitement over the possibility of a vaccine for COVID-19, which had recently shut down the world economy.
“The bottom line – the American election is very important, but the process can be incredibly noisy,” according to Michael Zezas, strategist at Morgan Stanley.
For the markets, Zezas also points out how the prices would have gone before the expected result from the election. A Trump win in this election could mean US tariffs on Mexican goods, for example, which could damage the value of the Mexican peso. But the peso has fallen against the US dollar in recent months, which could limit further moves if a Trump victory were to materialize.
Trump’s victory may also be less of a shock to markets this time around than in 2016, with Treasury yields rising amid expectations of tax cuts that could boost the strong US economy or increase debt. country. Treasuries have been rising in recent weeks, in part due to growing expectations in some corners of the market for a Trump victory, as well as more reports showing the US economy is you are still stronger than fear.
On Monday, Treasury yields gave back some of those gains. The yield on the 10-year Treasury fell to 4.31% from 4.38% on Friday.
Another investment that has become a barometer in the market for Trump’s chances of winning was very high. Trump Media & Technology Group traded between losses and gains through the morning before rising 8.1%.
The stock of the company behind Trump’s Truth Social platform had been rising from lows in September, until it hit a wall last week and has fallen at least 11% in three straight days.
In the oil market, the price of a barrel of US crude rose 2.8% to $71.03 after Saudi Arabia and other oil exporters said they would delay plans to increase the amount of crude they produced. Brent crude, the international standard, rose 2.7% to $75.08 a barrel.
The price of Brent has been down for the year so far, partly due to concerns about how much demand there will be from China given the economic problems.
The Standing Committee of China’s National People’s Congress meets this week, and analysts say the government could promote massive spending efforts to boost economic growth amid problems in the country’s real estate industry.
Beyond that meeting and Election Day in the United States, this week will also see the latest meeting of the Federal Reserve, where it is widely expected to cut its interest rate for the second time and straight.
The Fed kicked off its rate-cutting campaign in September with a larger-than-usual cut of half a percentage point, as it broadens its focus to include keeping the job market subdued. It’s a drastic change after the Fed kept interest rates high for two decades in order to slow the economy enough to end high inflation.
The hope that has driven US stock indexes to record highs recently is that the US economy may be able to avoid a recession that has long been feared, in part because of the coming reduction in interest rates. expected from the Fed.
On Wall Street, Nvidia rose 1.7%, and Sherwin-Williams jumped 4.1% after learning that they will replace Intel and the Dow chemical company’s parent in the Dow Jones Industrial Average.
Stocks fell in the nuclear power industry after US regulators rejected a request that would have sent some electricity to Amazon’s data center from a Pennsylvania nuclear plant operated by Talen Energy. Companies across the energy industry have been making deals with data center operators to feed their growing demand for more electricity, and Talen fell 2.5%.
In stock markets abroad, indices were sharply lower after rising in most of Asia.
___
AP Business Writer Elaine Kurtenbach contributed.
#Wall #Street #reeling #ahead #Election #Day #oil #key #commodities #jump