US stocks slumped on Monday as investors eagerly waited for the outcome of the US Presidential election on Tuesday.
At the time of writing, the Dow Jones Industrial Average slid 175 points, or 0.4%, while the S&P 500 index dropped 0.2%. The Nasdaq Composite shed 0.6% on Monday.
Stocks fell on Monday as yields on Treasury bills in the US rallied. This indicated that some investors may be reducing risk ahead of the election result.
Crude oil prices also rose sharply after the Organization of the Petroleum Exporting Countries and allies agreed Sunday to extend its voluntary production cuts till the end of December.
NVIDIA shares rise
Shares of NVIDIA Corporation rose more than 1% on Monday after a key announcement on Friday.
The S&P Dow Jones Indices announced on Friday that NVIDIA would replace rival Intel in the 30-stock Dow.
The change will take effect from this Friday. The move comes as the chipmaker has rallied since the beginning of this year, while Intel has performed poorly in the Artificial Intelligence sector.
Nvidia is up 176% year to date, while Intel has lost more than half of its value in that time, according to CNBC.
Meanwhile, shares of Trump Media & Technology shed 3% ahead of the election results on Tuesday. The stock has been increasingly volatile in the lead up to election day.
Election results
Election results on Tuesday could play a significant role for the equity benchmarks in the US.
Opinion polls show that former President Donald Trump and Vice President Kamala Harris are locked in a close battle.
However, much of the market aftershocks may hinge more heavily on which party takes control of Congress.
“If control of the US House of Representatives and Senate is divided, it would likely mean a maintaining of the status quo,” CNBC said in a report.
A sweep in the elections by either the Republicans or Democrats would mean new spending plans and different policies.
Experts believe Trump’s policies could add upward inflationary pressures in the US, which could be a key factor for the stock market movements.
CNBC quoted Morgan Stanley strategist Michael Zezas in a report:
The US election is incredibly important, but the process is likely to be incredibly noisy. Some patience, and a plan, can make the difference between navigating the noise and getting lost in it.
Fed rate cut decision
Along with the election result, investors will also eye the policy meeting of the US Federal Reserve later this week.
The market expects the US Fed to cut interest rates by 25 basis points after a 50 bps cut at its September meeting.
According to the CME FedWatch tool, traders have priced in a 96% probability of the Fed cutting interest rates by 25 bps.
The market will also look for any cues about the US central bank’s plans for its rate-cut cycle.
Viking Therapeutics surges, Marriott slumps
Shares of Viking Therapeutics surged more than 5% on Monday after results from its early-stage clinical trial showed its oral obesity drug making progress.
The company’s stock has surged more than 290% this year as the market sees potential for its oral obesity drug, which is in its clinical trial phase.
Patients taking a 100-milligram dose achieved an average weight loss of about 8.2% in a month, which was better than expected and tops rivals’ experimental treatments, according to a CNBC report.
On the other hand, shares of Marriott International slipped more than 2% after the hotel company’s third-quarter earnings fell short of analysts’ expectations.
The company reported adjusted earnings of $2.26 per share on $6.26 billion worth of revenue. Analysts with LSEG expected earnings of $2.31 per share and $6.27 billion worth of revenue.
Talen Energy plunges
Shares of the independent power company, Talen Energy plunged over 8% on Monday.
The stock slipped after the Federal Energy Regulatory Commission rejected a request to increase the amount of power the Susquehanna nuclear plant can dispatch to an Amazon data center campus, CNBC reported.
The company owns the nuclear plant and sold the data center campus to Amazon earlier in 2024.
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