The S&P 500 slid 0.3%, the Dow Jones Industrial Average declined 0.6%, while the Nasdaq composite slid 0.3%
U.S. stocks dropped Monday ahead of a week full of potential flashpoints around the world.
The S&P 500 slid 0.3%, though it remains near its record set last month. The Dow Jones Industrial Average declined 257 points, or 0.6%, while the Nasdaq composite slid 0.3%.
Intel stumbled 2.9%, and chemical producer Dow dipped 2.1% in their first trading since getting notified they’ll no longer be included in the DJIA. Warren Buffett’s Berkshire Hathaway skidded 2.2% and was one of the heavy weights on the market after reporting a decline in operating profit for the latest quarter.
But the majority of stocks within the S&P 500 advanced, including a 2.8% gain for Fox after it reported a stronger profit than expected. That was despite increases in some costs, including for newsgathering at Fox News to cover this election cycle.
Election Day will arrive Tuesday, though its result may not be known for some time as officials count all the votes. That has raised fears about the possibility of sharp swings in the country’s stock markets because markets infamously hate uncertainty.
History may be less foreboding. The broad U.S. stock market has historically gone on to rise regardless of which party wins the White House. And in 2020, U.S. stocks jumped immediately after Election Day and kept going even after former President Donald Trump refused to concede and challenged the results, creating plenty of uncertainty. A large part of that rally was due to excitement about the potential for a vaccine for COVID-19, which had just shut down the global economy.
Bottom line – the US election is important, but the process is likely to be incredibly noisy, as per Michael Zezas, a strategist at Morgan Stanley.
For markets, Zezas also points to how prices may have already moved ahead of expected outcomes from the election. A win for Trump this election could mean U.S. tariffs on Mexican imports, for instance, which could hurt the value of the Mexican peso. But the peso has already dropped against the U.S. dollar in recent months, which could limit further moves if a Trump win were actually to happen.
