Wall St slips as uncertainty surrounds U.S. election
Harris leads, Des Moines Register/Mediacom Iowa Poll shows
Nvidia up on inclusion to the Dow Jones Industrial Average
Russell 2000 outperforms, benefiting from lower bond yields
Updated at 4:00 p.m. ET/ 2000 GMT
By Chuck Mikolajczak
NEW YORK, Nov 4 (Reuters) -U.S. stocks closed slightly lower after a choppy session onMonday, as investors prepared fora crucial week in which Americans will elect a new president and the Federal Reserve will announce its policy statement.
Presidential candidates Donald Trump and Kamala Harris bothscrambled for an edge in the last full day of a race that polls show as extremely close. It could take days to determine the victor.
Some of the so-called "Trump trades" unwound aftera recent poll showed Harris, the Democratic vice president, leading in Iowa, sparkinga drop in the U.S. dollar USD=, Treasuryyields <US10YT=RR>and bitcoin BTC=. Trump Media & Technology Group DJT.O closed sharply higher, bouncing back from early losses of nearly 6%.
In light of the Iowa poll, Harris' odds against the Republican former president improvedon several betting sites, which many market participants eye as election indicators.
"Since we're going to take until Thursday or so, at least, to figure out who won, unfortunately this is going to be a pretty volatile week," said Sam Stovall, chief investment strategist at CFRA Research in New York.
"Earnings are going well, the Fed is still likely to cut interest rates, the only true uncertainty is the election, and hopefully that will be finalized sooner rather than later so investors can go back to investing."
According to preliminary data, the S&P 500 .SPX lost 15.02 points, or 0.26%, to end at 5,713.78 points, while the Nasdaq Composite .IXIC lost 56.99 points, or 0.31%, to 18,182.93. The Dow Jones Industrial Average .DJI fell 250.91 points, or 0.60%, to 41,801.28.
The benchmark 10-year Treasury note was last off about 5 basis points (bps), after initially dropping as much as 10 bps. Volatile trading was expecteduntil the election is decided and investors are clearer on government policy. The 10-year yield had fallen for five straight months before surging more than 48 bps in October.
The Russell 2000 .RUT rose as falling yields supported small cap stocks, seen as more likely to benefit from lower rates.
CBOE's Volatility Index, .VIX also known as Wall Street's "Fear Gauge," ticked slightly below the 22 mark but remained aboveits long-term average of 19.46 and hovered close to a near-two month high hit last week of 23.42.
Investors were largely pricing in a Fed interest rate cut of 25 bps at its policy announcement on Thursday, with CME'sFedWatch Tool showing markets pricing in a 98% chance of a cut, with only a 2% chance the central bank keeps rates steady.
The biggest gainer among the 11 major S&P sectors wasenergy .SPNY, up about 2% asoil prices climbed afterOPEC+ decided to delayplans for an output increase.
Chip heavyweight Nvidia NVDA.O advanced. On Friday, S&P Dow Jones Indices said the company would replace Intel INTC.O in the Dow Jones Industrial Average. Intel shares slipped to weigh onthe Dow.
Hotel operator Marriott International MAR.O lost ground aftercutting its 2024 profit forecast on weak domestic travel demand in the U.S. and China.
Constellation Energy CEG.O was the worst performer onthe S&P 500, tumbling after the Federal Energy Regulatory Commission on Friday rejected an agreement to increase the power capacity of an Amazon data center connected directly to Talen Energy's nuclear power plant in Pennsylvania. The decision weighed on theutilities sector <.SPLRCU>, which fell more than 1%.
The Trump Trade https://tmsnrt.rs/3YeC3tB
Reporting by Chuck Mikolajczak; additional reporting by Lisa Mattackal and Shashwat Chauhan in Bengaluru; Editing by David Gregorio
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