U.S. stock index futures were set to open slightly higher on Tuesday as voting began in a tightly contested presidential election, with traders girding up for volatile trading over the next few sessions until a winner is declared.
Opinion polls in the campaign’s final days showed Vice President Kamal Harris and Republican Donald Trump running neck-and-neck in each of the key seven states. But the final outcome could take days.
Most betting market odds, which many investors over the past few months have been relying to predict the outcome, showed the former president as the frontrunner.
The U.S. dollar and Treasury yields are moving in tandem with election outcome bets, while fully pricing in a 25-basis point cut to interest rate by the Federal Reserve.
The 10-year yield was up slightly but remained below the near four-month high of 4.388% touched last Friday.
The VIX, Wall Street’s “fear gauge”, stood at 21.95, above its 30-day moving average of 19.65, but below the two-month high, it hit last week.
“There’s certainly a lot of anxiety about the election result, but (good) economic data, Fed cutting rates, earnings coming in pretty strong can overwhelm that anxiety,” said Ross Mayfield, investment strategy analyst at Baird.
In case an unsettled result on Wednesday sparks investor anxiety, Mayfield recommends taking advantage of an election-related market pullback.
Investors are also keeping an eye on Congressional elections to determine the balance of power in Washington. Many analysts predict a split government, which would limit the ability of the President to enact significant policy changes.
Rate-sensitive megacap growth stocks rose in premarket trading, with Nvidia (NASDAQ: NVDA) up 0.8% and Meta Platforms (NASDAQ: META) adding 0.5%. Tesla (NASDAQ: TSLA) gained 1.8%.
Stocks viewed as bets on a win for the former president rose in choppy trading, with Trump Media & Technology Group (NASDAQ: DJT) and software developer Phunware (NASDAQ: PHUN) last up around 7% each.
Dow E-minis were up 28 points, or 0.07%, S&P 500 E-minis were up 9.25 points, or 0.16%, and Nasdaq 100 E-minis were up 60.5 points, or 0.3%.
Boeing (NYSE: BA) gained 2% as a prolonged and crippling strike ended after factory workers accepted a new contract offer.
Palantir (NYSE: PLTR) soared 15.4% after the data analytics firm raised its annual revenue forecast for the third time.
Emerson Electric (NYSE: EMR) climbed 6% on the industrial firm’s proposal to acquire the remaining outstanding common shares of Aspen Technologies for $ 240 per share in cash.
Adding to the action-filled week, the Fed’s November policy meeting starts on Wednesday. While markets are betting on a 25-bps rate cut, the outlook for future easing has grown uncertain as data points to a strong economy.
On the data docket, October S&P Global and ISM services PMI are expected after the opening bell.
(Source: Reuters)
