U.S. Stock Futures Stabilize Amid Election Tensions and Fed Anticipation

U.S. stock futures saw slight gains in Monday evening trading, stabilizing after recent losses on Wall Street due to investor caution before a close presidential election and an upcoming Federal Reserve meeting. Wall Street indexes had declined earlier in the day, continuing last week’s losses as anticipation grew for major events. Concerns about inflation have added pressure, as markets expect a less accommodative stance from the Fed.

Monday’s session ended with U.S. stocks slightly down, as declines in Utilities, Healthcare, and Telecoms sectors led the market lower. The S&P 500 remained subdued amid heightened market caution before the election and rate decisions. Investor sentiment was largely influenced by the tight race between Donald Trump and Kamala Harris, with some market participants preparing for a potential Trump victory, expecting it to bring inflationary policies.

Wedbush analysts noted concerns over Trump’s potential win impacting Big Tech, particularly due to possible U.S.-China tech conflicts and tariff increases that could disrupt supply chains and affect companies like Nvidia, Apple, and Tesla.

Energy stocks led the S&P sectors, gaining 1.87% as oil prices rose following OPEC+’s decision to delay an output increase. Nvidia also advanced slightly, while Intel dipped following news of the Dow replacement. Constellation Energy dropped sharply after regulatory rejection of an Amazon-related power agreement.

In recent earnings updates, Berkshire Hathaway’s Q3 results missed expectations, leading to a 2% stock decline, while Marriott's reduced profit forecast amid weak travel demand dropped its shares by 1.6%. Viking Therapeutics fell 13% over production concerns despite positive trial results. Meanwhile, Palantir’s strong earnings lifted its stock by nearly 13%, and Dollar Tree’s CEO transition boosted shares by 6.3%, reflecting a mixed outlook in the quarterly earnings season.

The CBOE Volatility Index rose to 21.94, near a recent two-month high, as investors largely anticipated a 25-basis-point Fed rate cut on Thursday, with a 98% probability.

Investors remained tense as polls indicated a close race between Donald Trump and Kamala Harris ahead of Tuesday’s election. Although Trump initially gained ground, recent polls show Harris in the lead, particularly in Iowa, which affected “Trump trades” as the dollar and Treasury yields fell. Trump is anticipated to pursue inflationary and tougher trade policies, which analysts believe could hurt the tech sector. Meanwhile, Harris has proposed higher taxes on wealthy individuals and corporations and tax relief for families.

Amid the election focus, the third-quarter earnings season continues, with companies like Builders FirstSource, Ferrari, and Super Micro Computer on Tuesday. Qualcomm, CVS, and Arm Holdings will report Wednesday, and investors will watch for updates on Arm’s lawsuit against Qualcomm. Pinterest, DraftKings, Cloudflare, and Affirm are due Thursday.

Data for Technical Analysis (1H) CFD US 500 [S&P 500]

Resistance : 5719.7, 5722.8, 5728.0

Support : 5709.3, 5706.2, 5701.0   

1H Outlook 

Source: TradingView

Buy/Long 1 If the support at the price range 5697.3 - 5709.3 is touched, but the support at 5709.3 cannot be broken, the TP may be set around 5722.9 and the SL around 5691.0, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 5719.7 - 5731.7, TP may be set around 5745.0 and SL around 5703.0, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 5719.7 - 5731.7 is touched, but the resistance at 5719.7 cannot be broken, the TP may be set around 5709.3 and the SL around 5738.0, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 5697.3 - 5709.3, TP may be set around 5682.0 and SL around 5726.0, or up to the risk appetite.       

Pivot Points Nov 5, 2024 02:24AM GMT