US close: Stocks fall as investors brace for election day

US stock markets finished lower on Monday as traders braced for volatility in the days ahead with the latest polls showing Donald Trump and Kamala Harris neck and neck in the race to become America’s 47th president.

"Weighted down by traders squaring up in pre-event positioning, Wall Street indexes wobbled through the New York session as investors steeled themselves for the high-stakes US election day," said Stephen Innes, managing partner at SPI Asset Management.

The Dow closed down 0.6%, while the S&P 500 and Nasdaq both slipped 0.3%.

All eyes are firmly fixed on Tuesday’s election, with pundits branding it a deadlocked race between the former president and current vice president. Congress will also draw an amount of investor attention, with a Republican or Democratic sweep of both the Senate and the House of Representatives likely meaning fresh spending plans or a tax overhaul would be put in place.

While polls are still yet to identify a clear favourite, financial markets had been pricing in a Trump win, with the 'Trump trade' – a stronger dollar, weaker bonds and stronger crypto – having performed well in recent weeks. However, the Trump trade was quickly unwinding on Monday as investors scaled back positions, with 10-year US Treasury yield 10.8 basis points to 4.289% and the US dollar index dropping 0.4%.

“With the race still too close to call, it seems investors aren’t ready to reposition portfolios until we get the result. However, the moment we get clarity on the winner could lead to some sharp movements in the market as investors play catch-up with the election,” said Dan Coatsworth, investment analyst at AJ Bell.

In economic news on Monday, US factory orders fell more than expected in September, according to the Census Bureau, representing the fourth decline in the past five months as orders for transportation equipment dropped sharply. New orders for manufactured goods were $2.8bn less in September at $584.2bn, down 0.5% over the month.

Later in the week, the Federal Open Markets Committee will meet for its two-day policy meeting on Wednesday and Thursday, with economists widely expecting to see the central bank cut its benchmark interest rate again – this time from 5.0% to 4.75%.

"Unperturbed by the political theatrics, markets remain locked in on expectations for a quarter-point rate cut on Thursday, followed by an additional 100 basis points of easing over the next 12 months," Innes from SPI Asset Management said. "Traders are sticking to their rate outlook, letting the economic indicators lead the way, even as election fever grips the headlines."

Market movers

Truth Social owner Trump Media & Technology Group rallied 12%, rebounding after having dropped more than 40% over the past three trading sessions, as the stock continues to be volatile ahead of the election. Since 23 September, the shares have risen by 183%.

Apple finished lower after Warren Buffett’s Berkshire Hathaway further lowered its stake in the tech giant Apple, downsizing its biggest equity holding for a fourth consecutive quarter. Berkshire’s quarterly report revealed it held $69.9bn worth of Apple shares at the end of September, implying the company had disposed of approximately a quarter of his stake.

The report also had a negative impact on Berkshire’s own stock after the investment company revealed that operating earnings fell 6% year-on-year in the third quarter.

Chip giant Nvidia was higher on the back of an announcement that it will join the Dow Jones Industrial Average this Friday. Nvidia will take the place of software group Intel, which moved firmly lower on Monday.

Dow Jones - Risers

Salesforce.Com Inc. (CRM) $298.01 1.12%
Home Depot Inc. (HD) $395.57 0.76%
Cisco Systems Inc. (CSCO) $55.83 0.59%
Chevron Corp. (CVX) $153.97 0.59%
Visa Inc. (V) $291.85 0.38%
Walmart Inc. (WMT) $82.45 0.32%
Boeing Co. (BA) $155.07 0.31%
Coca-Cola Co. (KO) $65.11 0.15%
Dowdupont Inc. (DWDP) $0.00 0.00%
Merck & Co. Inc. (MRK) $101.87 -0.01%

Dow Jones - Fallers

Intel Corp. (INTC) $22.52 -2.93%
Dow Chemical Co. (DOW) $47.95 -2.08%
Unitedhealth Group Inc. (UNH) $557.77 -1.72%
Goldman Sachs Group Inc. (GS) $511.47 -1.52%
JP Morgan Chase & Co. (JPM) $219.78 -1.42%
Walgreens Boots Alliance, Inc. (WBA) $9.33 -1.37%
Johnson & Johnson (JNJ) $158.24 -1.18%
Travelers Company Inc. (TRV) $242.81 -1.15%
Nike Inc. (NKE) $77.19 -1.11%
3M Co. (MMM) $125.85 -1.08%

S&P 500 - Risers

Bath & Body Works, Inc. (BBWI) $31.28 8.16%
Nektar Therapeutics (NKTR) $1.33 8.13%
CenturyLink Inc. (LUMN) $7.48 6.86%
Mosaic Company (MOS) $28.33 5.36%
Sherwin-Williams Co. (SHW) $374.40 4.59%
Gap Inc. (GAP) $21.61 4.19%
eBay Inc. (EBAY) $60.23 3.65%
AES Corp. (AES) $15.23 3.54%
Tapestry Inc. (TPR) $48.56 3.39%
Monster Beverage Corp (MNST) $54.06 3.37%

S&P 500 - Fallers

Affiliated Mgrs Group (AMG) $177.06 -8.64%
Public Service Enterprise Group Inc. (PEG) $81.87 -6.23%
Alaska Air Group Inc. (ALK) $47.23 -4.06%
American Airlines Group (AAL) $12.99 -4.06%
United Airlines Holdings Inc (UAL) $77.25 -3.99%
Chipotle Mexican Grill Inc. (CMG) $56.38 -3.77%
Zoetis Inc (ZTS) $175.18 -3.72%
Cardinal Health Inc. (CAH) $111.90 -3.64%
Loews Corp. (L) $76.51 -3.48%
Franklin Resources Inc. (BEN) $20.16 -3.26%

Nasdaq 100 - Risers

eBay Inc. (EBAY) $60.23 3.65%
Monster Beverage Corp (MNST) $54.06 3.37%
Trip.com Group Limited (TCOM) $67.24 3.14%
Henry Schein Inc. (HSIC) $72.33 2.79%
Cadence Design Systems Inc. (CDNS) $289.34 2.57%
Charter Communications Inc. (CHTR) $375.83 2.55%
Illumina Inc. (ILMN) $153.49 2.49%
Micron Technology Inc. (MU) $101.73 2.01%
Hologic Inc. (HOLX) $83.76 1.74%
Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) $383.66 1.59%

Nasdaq 100 - Fallers

Sirius XM Holdings Inc (SIRI) $25.93 -6.22%
American Airlines Group (AAL) $12.99 -4.06%
Intel Corp. (INTC) $22.52 -2.93%
Tesla Inc (TSLA) $242.84 -2.47%
Comcast Corp. (CMCSA) $42.53 -2.36%
Starbucks Corp. (SBUX) $97.03 -1.86%
Regeneron Pharmaceuticals Inc. (REGN) $828.84 -1.75%
Liberty Global plc Series C (LBTYK) $20.96 -1.60%
Marriott International - Class A (MAR) $256.43 -1.59%
JD.com, Inc. (JD) $39.86 -1.43%