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US stocks slipped on Monday, gearing up for a week of potentially huge market-moving events — the presidential election and the Federal Reserve policy decision.
The S&P 500 (^GSPC) dipped 0.2% after staging a comeback to end a losing week. The tech-heavy Nasdaq Composite (^IXIC) also slipped 0.2%, while the Dow Jones Industrial Average (^DJI) dipped about 200 points, or 0.5%.
A so-far solid earnings season and interest rate-cut optimism are giving the market reasons to be cheerful ahead of Tuesday's election, a big risk event for markets. The new president — whether Kamala Harris or Donald Trump — will set the course for the economy in the years that follow. The neck-and-neck race has investors bracing for volatility on Election Day itself.
Read more: The Yahoo Finance guide to the presidential election and what it means for your wallet
But with just one session to go, weekend polls showed Harris with a shock lead in Iowa and gaining ground elsewhere — a sign the Democrat has a better chance of winning than Wall Street had calculated. The dollar dropped by the most in a month as traders recalculated bets on a Trump victory. Treasury yields also retreated, with the 10-year benchmark yield (^TNX) sliding almost 10 basis points to 4.30%.
Also looming large is the Fed's two-day policy meeting, kicking off a day later than usual on Wednesday in light of the election.
Wall Street is convinced that Chair Jerome Powell will usher in a 0.25% rate cut on Thursday, despite signs of stubborn inflation and muddied job market signals. Given that, the focus is on what action the Fed might take at future meetings, with the market now seeing three fewer cuts through the end of 2025 than it previously expected.
Read more: What the Fed rate cut means for bank accounts, CDs, loans, and credit cards
In other markets, oil prices jumped nearly 3% after OPEC+, a group of major oil producers, decided to delay a planned hike in output by at least a month and Iran escalated Mideast tensions by warning of a "crushing response" to Israel's strikes.
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Energy stocks outperform, Utilities lag
Dow drops 400 points, stock near session lows
Stocks moved to session lows by mid-session on Monday with the S&P 500 (^GSPC) dropping 0.4% after a Wall Street Journal report suggested Russia plotted to send incendiary devices on planes headed to the US and Canada. The report cited western officials who said the devices that ignited in Europe were part of a plot to put them on cargo or passenger planes.
The tech-heavy Nasdaq Composite (^IXIC) flipped from positive to negative territory to drop 0.3% immediately following the report.
The Dow Jones Industrial Average (^DJI) slipped roughly 400 points, or almost 1%.
Nvidia stock jumps on AI spending spree, overtakes Apple as most valuable company
Nvidia (NVDA) stock rose 2.5% Monday as analysts pointed to rising chip sales and mounting spending on AI infrastructure. That jump helped the AI chipmaker reach a $3.40 trillion market cap, according to Yahoo Finance data, again overtaking Apple's (AAPL) roughly $3.35 trillion.
Apple shares traded slightly lower midday, down 0.5%.
Nvidia had last dethroned Apple a little over a week ago, but Apple briefly retook the crown — before its earnings weighed on the stock.
Nvidia's rise comes after a week of ups and downs, as Big Tech's earnings shone a spotlight on AI capital expenditures. Investors fear that spending coud ease in the coming years as infrastructure projects reach completion, weighing on AI chipmakers.
Wall Street analysts have largely remained bullish on AI hardware stocks, seeing infrastructure spending by Big Tech continuing to rise. Jefferies analysts led by Brent Thill said Monday that they expect Google (GOOG), Amazon (AMZN), Microsoft (MSFT), Meta (META), and Oracle (ORCL) to spend a combined $292 billion on AI capital expenditures in 2025, representing an 88% increase from 2023 expenses.
Meanwhile, Bernstein analyst Stacy Rasgon said in a note Monday that global semiconductor sales grew 7.6% in September — "a bit above typical" — from the prior month.
Rasgon said of Nvidia: "The datacenter opportunity is enormous, and still early, with material upside still possible."
Peloton jumps 9% on BofA upgrade
Peloton (PTON) shares rose 9% on Monday after Bank of America analysts upgraded the stock to a Buy from Neutral amid optimism over the fitness equipment maker's new leadership.
"Peloton's new CEO Peter Stern does not have public company CEO experience but meets all the criteria set by Peloton's board" including consumer software and hardware experience and subscription services, the analysts wrote.
Stern, an avid Peloton user who comes from Ford (F), will start his CEO role on Jan. 1.
Constellation Energy, nuclear stocks tumble after US rejects Amazon power deal
Constellation Energy (CEG) stock fell as much as 12% early Monday amid a broader decline in nuclear power stocks following the US government's rejection of another Big Tech nuclear power agreement late Friday.
The Federal Energy Regulatory Commission (FERC) rejected a proposal from a grid operator, PJM, to ramp up the amount of power supplied through the grid from Talen Energy (TLN) to an Amazon (AMZN) AI data center. Talen said in a statement on Sunday it believes the FERC "erred" in its ruling, adding the company is "evaluating our options, with a focus on commercial solutions."
Talen Energy dropped 9% in early trading, while Sam Altman-backed Oklo (OKLO) fell 8%, Centrus Energy (LEU) tumbled 19%, NANO Nuclear (NNE) dropped 10%, Vistra (VST) sank 4%, and NuScale Power (SMR) fell 7%.
Even with Monday's drop, Constellation Energy stock is up more than 90% this year and is among the best-performing stocks in the S&P 500.
DJT stock falls as shares brace for volatile week
Trump Media & Technology Group stock (DJT) fell around 2% in early trading on Monday after initially opening the day in the green. Shares are bracing for another volatile week on Wall Street just one day ahead of the presidential election.
The stock suffered its largest percentage decline last week and closed down around 20% to end the five-day period on Friday.
And since Tuesday, more than $4 billion has been shaved from the company's market cap, although the stock still has more than doubled from its September lows.
Prior to the recent sell-off, shares in the company, the home of the Republican nominee's social media platform Truth Social, had risen in recent weeks as both domestic and overseas betting markets shifted in favor of a Trump victory.
Prediction sites like Polymarket, PredictIt, and Kalshi all showed Trump's presidential chances ahead of those of Democratic nominee and current Vice President Kamala Harris. That lead, however, narrowed significantly over the weekend as new polling showed Harris surpassing Trump in Iowa, which has historically voted Republican.
Stocks wobble as markets brace for US elections, Fed policy meeting
US stocks dipped on Monday as investors braced for this week's US elections and a Federal Reserve policy meeting.
The S&P 500 (^GSPC) opened near the flat line, while the tech-heavy Nasdaq Composite (^IXIC) fell 0.1%. The Dow Jones Industrial Average (^DJI) slipped about 50 points.
Nvidia (NVDA) shares rose more than 1% at the open on news that the artificial intelligence chip heavyweight will enter the Dow on Friday, replacing chip giant Intel (INTC). Energy (XLE) stocks also gained on Monday amid surging oil prices.
Investors are focused on Tuesday's highly anticipated US presidential election, as well as on the Federal Open Market Committee meeting on Wednesday and Thursday. The markets largely anticipate policymakers will cut interest rates by 25 basis points.
First time homebuyers made up the lowest share of the housing market since 1981
Affordability concerns are locking more potential first-time homebuyers out of the housing market.
A new report showed that first-time homebuyers made up 24% of all buyers this year, marking the lowest share since 1981, according to data from the 2024 National Association of Realtors (NAR) profile of home buyers and sellers.
High home prices, elevated borrowing costs, and low inventory have hammered affordability over the past year, leaving many first-time buyers on the fence about purchasing a home. In July, the NAR surveyed over 167,000 recent homebuyers, who said the barriers to entry remained challenging.
“In the time frame surveyed, mortgage interest rates jumped to nearly 8%, and housing affordability reduced to historical lows. Home buyers continued to struggle with housing inventory,” NAR’s deputy chief economist Jessica Lautz told Yahoo Finance.
“At the same time, rental prices were rising and after a student debt pause, borrowers had to resume payments, making it difficult to save for a downpayment,” Lautz added.
Mortgage rates have jumped to between 6% to 7% this year — and now average mortgage rates are rising after hitting a two-year low in September. Meanwhile, entry-level buyers may also be bidding against those making all-cash offers.
“If a buyer was on solid financial footing to enter the buying market and there were multiple offers, there is a chance they were up against an all-cash offer,” Lautz said.
Oil jumps more than 2% as OPEC+ delays adding supply to market
Oil futures jumped more than 2.5% on Monday after OPEC+, a group of major oil producers, announced it would delay unwinding production cuts by a month.
West Texas Intermediate (CL=F) futures rose to trade above $71 per barrel while Brent (BZ=F), the international benchmark, hovered near $75 per barrel.
The Organization of the Petroleum Exporting Countries, along with Russia and other countries, said it would continue with its output cuts for one month until the end of 2024.
The decision to delay adding 180,000 million barrels per day starting in December had already been postponed in recent months amid volatile oil prices.
Good morning. Here's what's happening today.
Economic data: Factory orders (September), Durable goods orders (September)
Earnings: Berkshire Hathaway (BRK-A, BRK-B), Cleveland-Cliffs (CLF), Constellation Energy (CEG), Goodyear (GT), Hims & Hers (HIMS), Marriott International (MAR), Palantir (PLTR), Wynn (WYNN)
Here are some of the biggest stories you may have missed over the weekend and early this morning:
Why banks are (probably) rooting for Donald Trump
DJT slides as Trump Media traders get set for Election Day
Harris or Trump to shape US energy debate — but maybe not decide it
Oil rises as OPEC+ delays output hike, Iran steps up rhetoric
From stocks to crypto, investors are bracing for election swings
