U.S. Election, Earnings Reports, and Fed Decision Set to Shape Markets This Week

On Monday, futures for the S&P 500 and Nasdaq 100 saw gains, while Dow futures dipped slightly, as investors brace for a week packed with potentially market-shaking events. With the U.S. presidential election just one day away, both candidates are neck-and-neck, making final pitches to voters in critical battleground states. In addition, more corporate earnings reports are expected this week, along with the Federal Reserve’s anticipated policy announcement on Thursday.

1. Mixed Futures Performance

U.S. stock futures wavered on both sides of the flatline on Monday as investors looked ahead to a busy week featuring the U.S. presidential election, a flood of corporate earnings, and a crucial interest rate decision from the Federal Reserve.

By 03:30 ET (08:30 GMT), Dow futures dropped 30 points or 0.1%, S&P 500 futures rose by 10 points or 0.2%, and Nasdaq 100 futures climbed 40 points or 0.2%.

Wall Street’s main indexes closed in positive territory last week, as strong quarterly results from Amazon helped offset a sharp slowdown in U.S. job growth in October.

Equity markets seemed to overlook the weak employment report, attributing it to recent hurricanes and ongoing labor strikes. The U.S. economy added only 12,000 jobs last month, far below analysts’ expectations.

2. U.S. Election Just One Day Away

The focus now shifts to Tuesday’s high-stakes U.S. presidential election, with Republican candidate Donald Trump and Democratic contender Kamala Harris in a close race.

Over the weekend, both candidates ramped up their campaigning efforts in key swing states that could heavily influence the outcome.

Harris gained a notable advantage as a respected poll from traditionally conservative Iowa showed her leading Trump by three percentage points, largely due to strong support from women.

However, the race remains tight. A New York Times/Siena poll suggested Harris held narrow leads in Nevada, North Carolina, Georgia, and Wisconsin, while she and Trump were tied in critical states like Pennsylvania and Michigan. Trump held a slight three-point lead in Arizona.

3. Earnings Reports in Focus

About one-fifth of the companies in the S&P 500 are set to report their latest quarterly earnings this week.

According to FactSet data, 70% of S&P 500 companies have already reported, with roughly 75% posting earnings-per-share figures above estimates. This rate is slightly below the five-year average of 77% but aligns with the 10-year average of 75%.

Highlighting this week’s earnings lineup is Super Micro Computer, which saw a sharp drop in its stock price last week after its auditor, EY, resigned. Super Micro, a key partner for AI powerhouse Nvidia has benefited significantly from the recent surge in interest in artificial intelligence.

Other notable earnings announcements this week include Qualcomm (NASDAQ), Moderna (NASDAQ), and CVS Health (NYSE).

4. Federal Reserve Decision Approaches

The Federal Reserve is widely expected to announce a 25-basis-point rate cut at the conclusion of its two-day policy meeting on Thursday, following a substantial 50-basis-point reduction in September.

Friday’s nonfarm payrolls report reinforced expectations for a smaller cut, with downward revisions for the previous two months indicating a gradual cooling in the labor market.

Investors are hoping that the Fed’s statement and comments from Chair Jerome Powell will offer insights into whether economic resilience will persist and if the Fed might slow the pace of future rate cuts.

However, analysts at Morgan Stanley noted on Friday that they do not expect Powell to commit to a specific size or frequency for future cuts, instead reiterating that the Fed remains data-dependent.

5. Crude Oil Prices Rise

Oil prices surged on Monday after OPEC+, a coalition of oil-producing nations, delayed a planned production increase for December by at least a month due to recent price pressures from weakened demand.

By 03:30 ET, Brent crude had climbed 2.1% to $74.60 per barrel, while U.S. crude (WTI) rose 2.3% to $71.06 per barrel.

OPEC+ announced on Sunday that it would postpone its planned production hike of 180,000 barrels per day by at least a month.

This marks the second time the coalition has extended a 2.2 million barrels per day cut, suggesting that member countries remain concerned about global demand.