(Reuters) – Futures tied to the U.S. stock indexes edged higher on Monday in an action-packed week for global markets as Americans gear up to elect a new president, while the Federal Reserve will decide on more cuts to 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 5% and software developer Phunware that made apps for Trump campaign in 2020 fell 8.9%.
Betting site PredictIT showed Harris at 53 cents compared to him on 51 cents – what investors are willing to wager for a chance to win $1 – compared to 42 cents to 61 cents just a week ago.
At 5:25 a.m. ET, Dow E-minis were up 29 points, or 0.07%, U.S. S&P 500 E-minis were up 11.5 points, or 0.2% and Nasdaq 100 E-minis were up 34.75 points, or 0.17%.
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 22.56, well above its 30-day moving average of 19.45. It is, however, still way below the range of 34-41 it was trading in the week prior to the 2020 election.
“We are quite close to the historical peak of the market… these make me think that the upside, whatever the outcome, is going to be fairly limited,” said Sebastiano Chiodino, head of liability driven investments at Generali 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.
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 jumped 2.4%, after S&P Dow Jones Indices said on Friday the company would replace Intel in the Dow Jones Industrial Average. Intel shares dropped 2.3%.
Investors also await September U.S. factory orders and earnings from companies such as Constellation Energy and Marriott International before the bell.
(Reporting by Lisa Mattackal and Shashwat Chauhan in Bengaluru; Editing by Arun Koyyur)
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