By By Lisa Pauline Mattackal
(Reuters) -Wall Street futures rose slightly on Monday, as traders geared up for an action-packed week in which Americans will elect a new president and the Federal Reserve is likely to cut its benchmark policy rate.
A new poll showed Democratic candidate Kamala Harris leading in Iowa ahead of a Tuesday vote, even though rising bets of a win for Republican candidate Donald Trump in the recent weeks had lifted bond yields, dollar and bitcoin.
Stocks viewed as bets on the former president’s chances of victory dipped in premarket trading, while a drop in 10-year Treasury yield from its recent high eased pressure on the broader market.
Trump Media & Technology Group slipped 7.2% and software developer Phunware that made apps for Trump campaign in 2020 fell 9.6%.
Betting site PredictIT showed Harris edging past Trump, as bets on her stood at 55 cents versus 53 cents on the former U.S. president compared with 42 cents to 61 cents a week ago. This is what investors are willing to wager for a chance to win $1.
Dow E-minis were up 25 points, or 0.06%, S&P 500 E-minis were up 10 points, or 0.17% and Nasdaq 100 E-minis were up 20 points, or 0.1%.
The winner of the presidential race might not be known for days after voting ends on Tuesday and could result in choppy trading as investors await clarity on the policy implications.
CBOE’s VIX measure of expected equity volatility is trading at 22.38, well above its 30-day moving average of 19.44. It is, however, still way below the range of 31.8 to 41 it was trading in the week ahead of the 2020 election.
“We are quite close to the historical peak of the market… these make me think that the upside, whatever the (election) outcome, is going to be fairly limited,” said Sebastiano Chiodino, head of liability driven investments at Generali (BIT:GASI) Asset Management.
Meanwhile, investors remained largely sure of a 25 basis point interest-rate cut by the Fed in its November meeting, whose decision is expected on Thursday.
A sharply lower-than-expected October nonfarm payrolls number on Friday did little to change the bets on the size of the rate cut.
Wall Street had closed higher on Friday, but all the three major indexes fell on a weekly basis as a mixed set of earnings from technology megacaps led to losses in some of Wall Street’s largest companies.
Chip heavyweight Nvidia (NASDAQ:NVDA) jumped 2.1%, after S&P Dow Jones Indices said on Friday the company would replace Intel (NASDAQ:INTC) in the Dow Jones Industrial Average. Intel shares dropped 1.8%.
Hotel operator Marriott International (NASDAQ:MAR) lost 3.6% after cutting its 2024 profit forecast on weak domestic travel demand in the U.S. and China.
Constellation Energy dropped 9.1% after missing estimates for operating income.
Around 102 S&P 500 companies are expected to report quarterly earnings in the coming week. Investors also await September U.S. factory orders, due at 10:00 a.m. ET.