Election Jitters: NYSE Takes Precautions as Dow Plunges 0.61% Ahead of Presidential Vote

(New York = Yonhap News) Jinho Jin, Yonhap Infomax Correspondent = The New York stock market closed weakly a day before the US presidential election day.

While active trading was avoided considering the uncertainty of the presidential election, Nvidia regained the top spot in market capitalization during the day thanks to its inclusion in the Dow Jones Industrial Index.

New York Stock Exchange

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On the 4th (US Eastern time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed trading at 41,794.60, down 257.59 points (0.61%) from the previous day.

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The Standard & Poor’s (S&P) 500 index closed at 5,712.69, down 16.11 points (0.28%) from the previous day, and the Nasdaq Composite Index closed at 18,179.98, down 59.93 points (0.33%) from the previous day.

A day before the US presidential election, there was a clear atmosphere of panicking over uncertainty.

In the bond market and foreign exchange market, some of the so-called ‘Trump trade’ was returned to opinion polls over the weekend that showed that US Vice President Kamala Harris had brought the situation back to a close. As the two markets had been actively reflecting the dominance of former US President Donald Trump in their prices, there was a backlash trade ahead of Election Day.

In contrast, the stock market moved narrowly in a flat range and had a wait-and-see atmosphere. As adjustments had already been made since the middle of last month due to the uncertainty of the presidential election itself, the trend was to wait for the results of the presidential election rather than actively reversing the Trump deal.

Last weekend, a wait-and-see attitude deepened as a public opinion poll showed Harris ahead of Trump in Iowa, a Republican-dominant state.

Additionally, a series of survey results showed that Harris had almost completely narrowed the gap with Trump over the weekend.

According to the New York Times’ (NYT) analysis of public opinion polls as of the 1st, Harris has an edge in Michigan (about 1 percentage point) and Wisconsin (less than 1 percentage point) by swing state, and is tied with former President Trump in Nevada. Trump is ahead in Pennsylvania (less than 1 percentage point), North Carolina (1 percentage point), Georgia (2 percentage points), and Arizona (3 percentage points).

If the current opinion polls lead to the presidential election results, Trump will win with 281 out of 538 electoral votes. However, based on some claims that Harris’ approval rating was underestimated, if Harris wins in areas where the approval rating gap is less than 1 percentage point, Harris will secure 276 electoral votes. The victory standard is 270 people.

“This election is too close to predict,” said Lauren Goodwin, chief market strategist at New York Life Investments. He said.

“The election results may not be a green light for the stock market,” said Andrew Smith, chief investment strategist at Delos Capital Advisors. “The market is very confused right now and barely containing it.”

There is also speculation in the market that which party controls Congress will determine the direction of the stock market as much as the presidential election. The analysis is that if the political party that wins the general election held along with the presidential election also wins the presidential election, its fiscal spending plan and tax system reform will gain momentum.

Meanwhile, on this day, NVIDIA was incorporated into the Dow index and showed signs of regaining first place in market capitalization during the session. NVIDIA was decided to be included in the Dow Index on behalf of Intel after the close of the previous trading day. Intel suffered the humiliation of being kicked out of the Dow after 25 years.

Due to this good news, Nvidia’s stock price rose by 2.63% during the session, surpassing Apple to take first place in market capitalization. However, towards the latter half of the market, the increase decreased and it ended up finishing in second place in market cap.

Apple fell 0.4% on this day, but maintained its No. 1 market cap position.

Intel’s stock price fell 2.93% on the news that it was expelled from the Dow.

In addition to NVIDIA, Sherwin Williams, a paint manufacturer with over 150 years of history, will also be newly included in the Dow index instead of chemical company Dow. Dow was listed as a constituent stock of the Dow Index in 2019, replacing its parent company, DowDuPont.

Sherwin Williams shares rose more than 4%, while the Dow fell 2%.

Artificial intelligence (AI) solution company Palantir Technology’s stock price is soaring 12% in after-hours trading as its third-quarter results and fourth-quarter sales forecast announced after the market close on this day are favorable.

Palantir’s third-quarter adjusted EPS was 10 cents, exceeding market expectations of 9 cents. Sales also exceeded expectations at $725 million.

“The U.S. election is incredibly important, but the process is likely to be incredibly noisy,” said Michael Jezez, a strategist at Morgan Stanley.

By industry, only consumer staples, materials, real estate, and energy rose. Among these, energy rose 1.87% and real estate rose 1.13%. All remaining industries fell, with utilities falling 1.21%.

According to the Chicago Mercantile Exchange (CME) fed watch tool, the probability of the benchmark interest rate being frozen in November in the federal funds rate futures market was reflected as 2%, and the probability of a 25bp cut was reflected as 98%. The market seems to be considering a 25bp interest rate cut as a fait accompli.

The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) recorded 21.98, up 0.10 points (0.46%) from the previous day.

jhjin@yna.co.kr

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2024/11/05 06:56 Sent