Stock Market Recap: Election Eve Jitters and Fed Watch – November 4, 2024
Market Performance Overview
On Monday, November 4, 2024, U.S. stock markets experienced a day of choppy trading as investors braced for a pivotal week dominated by the presidential election and the Federal Reserve’s policy decision. The major indexes struggled to find direction, reflecting the uncertainty surrounding these key events.
The S&P 500 (SPX) edged up slightly by 0.1%, hovering near its recent record levels. The Dow Jones Industrial Average (DJI) fell 0.3% or 144 points to 41,654.14, while the Nasdaq Composite (IXIC) managed a modest gain of 0.3%, closing at 18,165.94 .
Election Uncertainty Weighs on Markets
The tightly contested presidential election between Democratic candidate Kamala Harris and Republican Donald Trump is creating significant market uncertainty. Recent polls showing Harris leading in Iowa have triggered volatility in various asset classes, including a retreat in the dollar, bond yields, and bitcoin .
Adam Turnquist, chief technical strategist for LPL Financial, commented, “It’s a bit of calm before the storm this week… The playbooks of the 2016 and 2020 elections might be thrown out the window” . This sentiment is reflected in the CBOE Volatility Index (VIX), which is trading at 22.54, well above its 30-day moving average of 19.45 .
Federal Reserve Meeting in Focus
Investors are also closely watching the Federal Reserve’s two-day policy meeting scheduled for later this week. Market participants are largely anticipating a 25 basis point interest rate cut, which would mark the second consecutive reduction . This expectation has contributed to the recent stock market rally and record-setting performances.
Key Stock Movements and Sector Performance
Several notable stocks made significant moves on Monday:
1. Nvidia (NVDA): Rose 2.5% following the announcement of its inclusion in the Dow Jones Industrial Average .
2. Tesla (TSLA): Dropped 1.8% due to declining China-made vehicle sales in October .
3. Amazon (AMZN): Although not specifically mentioned for November 4, it had jumped 6.2% the previous Friday after beating earnings expectations .
4. Marriott International (MAR): Fell 2% after cutting its 2024 profit forecast due to weak domestic travel demand in the U.S. and China .
5. Constellation Energy (CEG): Slumped 11.1%, becoming the biggest loser on the S&P 500 following its earnings report .
Sector-wise, energy stocks showed strength, with the Energy Select Sector SPDR (XLE) rising 1.4% as oil prices increased following OPEC+’s decision to delay output increases .
Upcoming Market Events
1. U.S. Presidential Election (November 5, 2024): The outcome may not be immediately clear, potentially leading to extended market volatility .
2. Federal Reserve Policy Decision (Expected November 7, 2024): Markets anticipate a 25 basis point rate cut .
3. China’s National People’s Congress Standing Committee Meeting: Analysts predict potential endorsement of major spending initiatives to boost economic growth .
Economic Indicators and Global Factors
Recent economic data has shown mixed signals. The U.S. economy added only 12,000 jobs in October, significantly below expectations, marking the weakest job creation since December 2020. However, the unemployment rate remained steady at 4.1% .
Oil prices saw an uptick, with Brent crude rising 1.7% to $74.36 per barrel, although it remains down for the year due to concerns about Chinese demand .
Market Outlook
As we enter this crucial week, market participants are cautiously optimistic but prepared for potential volatility. The combination of election uncertainty, anticipated Fed action, and ongoing global economic challenges is likely to keep investors on their toes.
Investors are advised to stay informed and maintain a balanced portfolio approach as these significant events unfold. The market’s reaction in the coming days could set the tone for the remainder of the year and potentially impact long-term economic policies.
