Stock market today: Indexes drop ahead of Tuesday’s presidential election

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Vice President Kamala HarrisMegan Varner/Getty Images
  • US stocks fell as investors braced for the US presidential election on Tuesday.

  • Kamala Harris has gained momentum recently, hitting popular Trump trades in the market.

  • Investors will have little time to rest after the vote, with the Fed’s policy meeting starting Wednesday.

US stocks traded lower on Monday as investors turned their attention to the presidential election on Tuesday.

More than 76 million Americans have voted via mail-in ballots or early in person, suggesting a potential record turnout this year.

After a shock Iowa poll showed Kamala Harris leading in the state against Donald Trump over the weekend, betting odds tightened in the race after Trump spent the weeks leading up to the vote far ahead of Harris.

Harris’ momentum in the election’s final days weighed on the Trump trade on Monday, with Treasury yields, the US dollar, and bitcoin all falling.

For a full rundown of the implications for the economy and stock market based on who wins the election, read BI’s deep dive on the potential impacts here.

Analysts from Citi on Monday noted that the stock market isn’t behaving like it has in past election years. Stocks tend to waver amid the uncertainty, but the rally has largely continued in the months leading to the vote, suggesting that investors are more attuned to macroeconomic data and earnings.

“US equities have been very strong coming into this election cycle compared to the past,” the analysts said. “The current anomaly has less to do with the market pricing a certain election outcome but more to do with an expectation of continued interest rate cutting combined with a likely shallower US economic slowdown.

After the election, investors will shift their attention to the Federal Reserve. The central bank’s next policy meeting is scheduled for Wednesday and Thursday, with an interest rate decision to come at 2 p.m. ET Thursday.

According to the CME FedWatch Tool, markets see a 96% chance of the Fed cutting rates by 25 basis points.

Here’s where US indexes stood at the 4:00 p.m. closing bell on Monday:

Here’s what else is going on:

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