Stock market today: Wall Street drifts ahead of Election Day, while oil jumps and yields sink
NEW YORK (AP) — U.S. stocks are drifting Monday ahead of a momentous week full of potential flashpoints, but other markets are already moving more sharply, including a jump for oil prices and drops for Treasury yields.
The S&P 500 was flat in early trading, though it’s still near its record set last month. The Dow Jones Industrial Average was down 135 points, or 0.3%, as of 9:50 a.m. Eastern time, and the Nasdaq composite was 0.1% lower.
Marriott International fell 3.1% after reporting weaker profit for the latest quarter than analysts expected. But Fox climbed 3.9% after the media giant reported stronger profit for the latest quarter than expected. That was despite increases in some costs, including for newsgathering at Fox News for this election cycle.
Election Day will arrive Tuesday, though its result may not be known for some time as officials count all the votes. That’s raised fears about the possibility of sharp swings around the world because markets infamously hate uncertainty.
That’s even though the broad U.S. stock market has historically gone on to rise regardless of which party wins the White House. And in 2020, U.S. stocks rose immediately after Election Day and kept going even after former President Donald Trump refused to concede and challenged the results, creating lots of uncertainty. A large part of that rally was also due to excitement in the market around the potential for a vaccine for COVID-19, which had just shut down the global economy.
“Bottom line – the US election is incredibly important, but the process is likely to be incredibly noisy,” according to Michael Zezas, a strategist at Morgan Stanley.
For markets, Zezas also points to how prices may have already moved ahead of expected outcomes from the election. A win for Trump this election could mean U.S. tariffs on Mexican imports, for example, but the value of the Mexican peso has already fallen against the U.S. dollar in recent months. That could limit further moves if a Trump win were to actually happen.
A Trump victory would also be less of a surprise to markets this time around than in 2016, when Treasury yields soared amid expectations for tax cuts that could fuel a stronger U.S economy, further inflate its debt or both. Treasury yields have already climbed in recent weeks, in part due to rising expectations in some market corners for a Trump win, along with a spate of reports showing the U.S. economy remains more resilient than feared.
On Monday, Treasury yields gave back a chunk of those gains. The yield on the 10-year Treasury fell to 4.27% from 4.38% late Friday.
Another investment that’s become a barometer for Trump’s perceived chances of victory was swinging sharply. Trump Media & Technology Group veered between a loss of 3.8% and a gain of 6.3% in the first few minutes of trading. It had been ripping higher from a bottom in September, until it hit a wall last week and dropped at least 11% in three straight days.
In the oil market, the price for a barrel of U.S. crude rose 2.6% to $71.29 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 2.6% to $74.98.
Beyond Election Day in the United States, this week will also feature the latest meeting of the Federal Reserve, where the widespread expectation is for it to cut its main interest rate for a second straight time.
The Standing Committee of China’s National People’s Congress is also meeting this week, and analysts were predicting the government may endorse major spending initiatives to boost the world’s second-largest economy after two straight quarters of growth below the government’s target of about 5% for the year.
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AP Business Writer Elaine Kurtenbach contributed.