Stock Market Recap: Wall Street Drifts Amid Election Uncertainty and Fed Rate Decision Anticipation
Major Indexes Close Lower as Investors Navigate Pre-Election Jitters
On Monday, November 4, 2024, U.S. stock markets experienced a choppy trading session, with major indexes closing lower as investors grappled with uncertainty surrounding the upcoming presidential election and anticipated Federal Reserve rate decision. The S&P 500 (SPX) fell 0.48% to 5,701.28, while the Dow Jones Industrial Average (DJI) dropped 0.95% to 41,654.14, and the Nasdaq Composite (IXIC) declined 0.41% to 18,165.94.
Why Was the Market Down Today?
The market’s cautious stance can be attributed to several factors:
1. Election Uncertainty: With the U.S. presidential election scheduled for Tuesday, investors are bracing for potential market volatility. The tight race between Democratic candidate Kamala Harris and Republican Donald Trump has created an atmosphere of uncertainty, with the final outcome potentially unknown for days after voting ends.
2. Federal Reserve Meeting: Investors are eagerly awaiting the Federal Reserve’s two-day policy meeting later this week. Market participants largely expect a 25 basis point interest rate cut, which could significantly impact various sectors of the economy.
3. Weak Jobs Data: Recent employment figures showed the U.S. economy added only 12,000 jobs in October, significantly below the expected 113,000. This weak jobs report has raised fresh concerns about the economy’s health, although the unemployment rate remained steady at 4.1%.
Notable Stock Movements and Sector Performance
Despite the overall market decline, several stocks and sectors saw significant movements:
1. Nvidia (NVDA) rose 1.6% after the announcement of its inclusion in the Dow Jones Industrial Average, replacing Intel (INTC).
2. Tesla (TSLA) dropped 1.8% following reports of declining China-made vehicle sales in October.
3. Marriott International (MAR) lost 2% after cutting its 2024 profit forecast due to weak domestic travel demand in the U.S. and China.
4. Constellation Energy (CEG) was the biggest loser on the S&P 500, slumping 11.1% after its earnings report.
5. The energy sector (.SPNY) rose 1.4% as oil prices increased following OPEC+’s decision to delay plans for increased output.
Market Volatility and Investor Sentiment
The CBOE Volatility Index (.VIX), often referred to as the “fear gauge,” traded at 22.54, well above its 30-day moving average of 19.45. This elevated level reflects increased investor anxiety ahead of key events this week.
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… what dictates the level of volatility will be when we get results.”
Looking Ahead: Key Events to Watch
As investors navigate this crucial week, several key events warrant close attention:
1. U.S. Presidential Election (November 5): The outcome could significantly impact market sentiment and sector performance.
2. Federal Reserve Policy Meeting (November 6-7): The expected interest rate decision will influence various aspects of the economy and financial markets.
3. Ongoing Earnings Season: Continued corporate earnings reports will provide insights into company performances and economic health.
4. Global Economic Data: Upcoming economic indicators from major economies could sway market sentiment.
In conclusion, the stock market’s performance on November 4, 2024, reflected a cautious approach from investors as they brace for a week filled with potential market-moving events. The combination of election uncertainty, anticipated Fed action, and mixed economic signals has created a complex environment for market participants to navigate.
As the week unfolds, market volatility is expected to remain elevated, with investors closely monitoring election results, Fed decisions, and economic data for clues about the market’s future direction. Prudent investors will stay informed and remain prepared for potential market swings in the coming days.
