Stock market activity shows optimism in the final stretch towards the US presidential elections and the expectation of interest rate cuts. However, Harris’ surprise lead in the polls and fluctuations in the dollar indicate that political and economic uncertainty will generate market volatility.
US stocks trade higher this Monday in Wall Street and they are preparing for a week of important events that could shake the market: the presidential election and the Federal Reserve’s policy decision.
He S&P 500 climbs 0.4%. He Nasdaq 100with a high technological concentration, rose 0.8% while the Dow Jones Industrial Average gained 0.7%.
A so far strong earnings season and optimism for an interest rate cut are giving the market reason to be optimistic ahead of Tuesday’s election, a high-risk event for markets. The new president, whether Kamala Harris or Donald Trump, will set the course of the economy for years to come. The race is very close and investors are bracing for volatility on Election Day itself.
Wall Street and the electoral contest
However, with just one session left, weekend polls showed Harris holding a surprising lead in Iowa and gaining ground elsewhere, indicating the Democrat has a better chance of winning than Wall Street had previously thought. calculated. The dollar fell the sharpest in a month as traders unwound bets on a Trump victory. Treasury yields also retreated, with the benchmark 10-year yield (^TNX) falling nearly 10 basis points to 4.30%.
Also looming is the Fed’s two-day policy meeting, which will begin a day later than usual on Wednesday due to the election.
Wall Street is convinced that Chairman Jerome Powell will announce a 0.25% rate cut on Thursday, despite signs of persistent inflation and confusing labor market signals. Given this, attention is focused on actions the Fed could take at future meetings, as the market now forecasts three fewer cuts through the end of 2025 than previously expected.
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At the same time, earnings continue to come in, with AI server maker Super Micro Computer (SMCI), Arm (ARM) and Qualcomm (QCOM) among those scheduled to report this week. With 70% of the S&P 500 having reported quarterly results, the benchmark index is on track to achieve its fifth consecutive quarter of earnings growth as it recovers from the 2023 earnings downturn.
Elsewhere, oil prices jumped 3% after OPEC+ decided to delay a planned increase in production for at least a month, and Iran escalated tensions in the Middle East by warning of an “overwhelming response” to Israel’s attacks. .
Source: Ambito
I am an author and journalist who has worked in the entertainment industry for over a decade. I currently work as a news editor at a major news website, and my focus is on covering the latest trends in entertainment. I also write occasional pieces for other outlets, and have authored two books about the entertainment industry.
