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US election looms large; earnings, Fed decision this week - what's moving markets

Published 2024-11-04, 03:42 a/m
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Investing.com - Futures for the S&P 500 and Nasdaq 100 both climbed on Monday, while Dow futures were slightly lower, as traders prepare for a week chalked full of potentially market-moving events. The US presidential election is now just one day away, with both candidates all but tied as they make their closing arguments to voters across crucial battleground states. Elsewhere, more corporate earnings are due out this week, while the Federal Reserve will announce its latest policy decision on Thursday.

1. Futures mixed

US stock futures hovered around both sides of the flatline on Monday as investors looked ahead to an event-filled week which will include everything from the US presidential election to a raft of corporate earnings and a major Federal Reserve interest rate decision.

By 03:30 ET (08:30 GMT), the Dow futures contract had shed 30 points or 0.1%, S&P 500 futures had risen by 10 points or 0.2%, and Nasdaq 100 futures had gained 40 points or 0.2%.

The main averages on Wall Street closed in the green to end the prior week, as solid quarterly results from e-commerce behemoth Amazon (NASDAQ:AMZN) offset a steep drop in US job growth in October.

Equity markets seemed to largely brush aside the weak employment report, citing the impact of recent devastating hurricanes and ongoing labor strikes. The US economy added only 12,000 roles last month, far below analysts' expectations.

2. US election one day away

Attention now turns to the all-important US presidential election on Tuesday, with the race between Republican Party candidate Donald Trump and Democratic rival Kamala Harris extremely close.

Over the weekend, both candidates were campaigning furiously in key battleground states that could heavily sway the outcome of the ballot.

Harris received a particular boost when a respected survey out of the traditionally conservative-leaning state of Iowa showed her leading Trump by three percentage points, due in large part to support among women.

Still, the contest remains virtually tied. A New York Times/Siena poll suggested that Harris was clinging to leads in Nevada, North Carolina, Georgia and Wisconsin, while Harris and Trump were even in the crucial swing states of Pennsylvania and Michigan. In Arizona, Trump holds a three percentage point advantage.

3. Earnings this week

Meanwhile, around a fifth of the companies in the benchmark S&P 500 are due to unveil their latest quarterly earnings this week.

Overall, 70% of the S&P 500 has reported, with three-fourths of these posting actual per-share eanrings above estimates, according to FactSet data. This is below the 5-year average of 77%, but equal to the 10-year average of 75%, FactSet added.

Highlighting the week's slate of earnings will be server maker Super Micro Computer (NASDAQ:SMCI), which logged a sharp drop in its share price last week after it said EY had resigned as its auditor. Super Micro, a crucial partner for artificial intelligence-darling Nvidia (NASDAQ:NVDA), has been a major beneficiary of the spike in enthusiasm around the nascent technology.

Chipmaker Qualcomm (NASDAQ:QCOM), pharmaceutical group Moderna (NASDAQ:MRNA), and healthcare firm CVS Health (NYSE:CVS) are also set to announce results this week.

4. Fed decision looms

The Federal Reserve is widely expected to deliver a 25-basis point interest rate cut at the conclusion of its latest two-day policy meeting on Thursday, following the central bank's decision to roll out a jumbo 50-basis point reduction in September.

Friday’s nonfarm payrolls report cemented expectations for a smaller rate cut. Jobs growth for the prior two months was also revised lower, indicating that the labor market is gradually cooling.

Investors will be hoping the Fed's statement and comments by Chair Jerome Powell will provide more insight into whether officials believe economic resilience will continue - and if they might cut rates more slowly as a result.

However, analysts at Morgan Stanley (NYSE:MS) said in a note Friday that they do not expect Powell "to commit to the size or cadence of future cuts but to reiterate that the Fed remains data dependent."

5. Crude rises

Oil prices rose strongly Monday after OPEC+, a group of producing nations, delayed a planned output hike in December by at least a month because of recent pressure on prices from weak demand.

By 03:30 ET, the Brent contract climbed 2.1% to $74.60 per barrel, while U.S. crude futures (WTI) traded 2.3% higher at $71.06 a barrel.

The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, announced on Sunday that it will again delay a planned output hike of 180,000 barrels per day by at least a month.

This was the second time it has extended a 2.2 million bpd cut and may suggest worries among the producing countries about global demand.

Both contracts had posted weekly declines last week of over 3% as record US output had added to the demand concerns.

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