Traders work on the floor of the New York Stock Exchange.
NYSE
Stocks stumbled on Monday as investors geared up for the U.S. presidential election and a potential Federal Reserve rate cut later this week.
The Dow Jones Industrial Average slumped 257.59 points, or 0.61%, to close at 41,794.60. The S&P 500 dipped 0.28% to settle at 5,712.69, and the Nasdaq Composite dropped 0.33% to 18,179.98.
Trading was choppy throughout the day. The Dow at one point fell more than 400 points, while the S&P 500 and Nasdaq shuffled between gains and losses.
The Dow was down more than 400 points at its lows on Monday.
Tuesday’s election results could play a pivotal role in where stocks finish off the year. The latest poll from NBC News shows a “deadlocked race” between former President Donald Trump and Vice President Kamala Harris.
Lauren Goodwin, economist and chief market strategist at New York Life Investments, said investors appear to be trying to price in the relatively small changes in the perception of who is likely to win the election.
“This election is too close to call. Neither I nor anyone else has any real edge on what’s likely to happen. So that makes the market’s moves kind of binary,” Goodwin said.
Any market aftershocks may depend on which party takes control of Congress. Major legislative changes would be difficult to pass if control of the U.S. House of Representatives and Senate is divided. A Republican or Democratic sweep, however, would likely be coupled with a White House victory for the same party, and could mean ambitious spending plans or a tax overhaul.
A small rally for Nvidia helped stabilize the market for most of the day, but the stock closed well off its highs for the session. Shares finished up about 0.5% after S&P Dow Jones Indices announced late Friday that the chipmaker would replace rival Intel in the 30-stock Dow. The change, which takes effect at the end of the week, comes as Nvidia continues to rip higher while Intel languishes in the artificial intelligence race.
Nvidia is up 174% year to date, while Intel has lost more than half its value in 2024.
NVDA vs INTC year to date
Elsewhere, utility stocks weighed on the market after federal regulators rejected a Talen Energy request to increase nuclear power at a plant in Pennsylvania to provide more electricity for an Amazon data center. Stocks tied to fossil fuels and solar power both rose, however, and oil climbed 2%.
Financials and health-care stocks were also weak areas of the market, as Goldman Sachs and UnitedHealth Group fell 1.5% and 1.7%, respectively, dragging down the Dow.
Along with the election, Wall Street is also bracing for the latest rate decision from the Federal Reserve on Thursday. Traders are pricing in a 98% likelihood of a quarter-point rate cut at the conclusion of the central bank’s policy meeting, according to CME Group’s FedWatch Tool. That would follow a half-percentage-point reduction by the central bank in September.
The moves in stocks Monday came as safe-haven U.S. Treasurys rallied, suggesting that some investors may be reducing risk ahead of Election Day. The benchmark 10-year Treasury was trading at a yield of about 4.3% on Monday, down from roughly 4.36% on Friday. Yields on bonds move in the opposite direction from their price.
— CNBC’s Sarah Min contributed reporting