US Presidential Election Jitters: Dow Plunges 0.61% as New York Stock Market Takes a Hit
Investors’ wait-and-see stance deepens as presidential election becomes unpredictable and very close
Some Trump trading returns… FOMC also pays attention
▲Traders are working on the floor at the New York Stock Exchange (NYSE) in New York, USA. New York (USA)/Reuters Yonhap News
The New York stock market fell ahead of the US presidential election on the 4th (local time).
On the New York Stock Exchange (NYSE), the Dow closed at 41,794.60, down 257.59 points (0.61%) from the previous day. The S&P 500 index ended trading at 5712.69, down 16.11 points (0.28%) from the previous trading day, and the Nasdaq index ended trading at 18,179.98, down 59.93 points (0.33%) from the previous trading day.
Ahead of the U.S. presidential election on November 5, some major stocks were sold for the purpose of adjusting their highs and taking profits. The Dow’s decline even exceeded $400 at one point.
In U.S. presidential opinion polls, the approval ratings between Democratic presidential candidate U.S. Vice President Kamala Harris and Republican presidential candidate former U.S. President Donald Trump are tightly contested. It is expected to be a close match, and it may take some time to confirm the results. “Investors are taking a wait-and-see approach,” said Michael O’Rourke, chief market strategist at Jones Trading.
On betting sites, the odds of former President Trump winning the presidential election have decreased. Investors had a tendency to bet on assets that could benefit if former President Trump is re-elected, but this has partially reversed. Selling pressure flowed into financial stocks that were expected to benefit from former President Trump’s push for deregulation.
“I think investors are trying to price in the relatively small change in perception of who will win,” said Lauren Goodwin, chief market strategist at New York Life Investments. He continued, “This election is too close to decide the winner. “No one can predict with certainty what will happen,” he added.
The market can fluctuate depending on which party controls Congress, not only in the presidential election but also in the parliamentary elections. If the two major parties divide the U.S. Senate and House of Representatives, it may be difficult to pass major law amendments. However, if the Republican or Democratic parties sweep Congress, it is highly likely that ambitious spending plans or tax reform will be implemented along with the same party winning the White House.
Among individual stocks, artificial intelligence (AI) semiconductor company Nvidia and paint company Sherwin Williams, which will be included in the Dow index starting on the 8th, showed strength. S&P Dow Jones, which manages the Dow, announced on the 1st that it will adopt Nvidia and Shawin Williams as new constituents of the Dow Jones Industrial Average, the representative U.S. stock index. Any changes will be applied before trading begins on the 8th.
The market is also paying attention to the Federal Reserve’s (Fed) decision on interest rates scheduled for this week. According to the Chicago Derivatives Exchange (CME) Group’s FedWatch tool, the Federal Reserve’s FOMC meeting in November base interest rateThe probability of a 25bp cut was reflected as 98%.
By industry, energy and real estate stocks rose 1.87% and 1.13%, respectively. The consumer staples and materials sectors also showed strength. On the other hand, other sectors showed weakness, with utilities falling 1.21%.
The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) recorded 21.98, down 0.10 points (0.46%) from the previous day.