Nasdaq 100 and S&P 500: Markets Brace for Election Volatility and Fed Rate Cut

Corporate earnings continue to drive stock movements. Palantir surged 12% in premarket trading after robust quarterly results, while NXP Semiconductors fell 5% due to a weaker outlook amid macroeconomic concerns. Dollar Tree advanced 4% on a CEO transition, while Wynn Resorts dipped 2% on disappointing earnings. These earnings underscore mixed economic conditions, with some sectors thriving—particularly technology—while others face headwinds.

Bank of America’s election playbook projects that a Republican win could benefit financial firms like Robinhood and Nasdaq, potentially lifting regulatory pressures. Conversely, a Harris-led administration might initially favor firms like BlackRock due to likely regulatory shifts on fees. However, BofA cautions that Trump’s proposed tariffs and immigration restrictions could increase inflation and reduce GDP growth, possibly dampening benefits of lower taxes.

Treasury Yields Reflect Election Jitters

U.S. Treasury yields rose slightly on Tuesday, with the 10-year yield up to 4.329% and the 2-year yield at 4.191%, as bond markets adjust to potential shifts in fiscal policy.

Market Outlook: Short-Term Volatility Likely, Year-End Gains Possible

Near-term volatility is expected as election results unfold, but historical trends suggest positive momentum toward year-end. However, longer-term gains hinge on the political landscape, Fed policy direction, and regulatory changes, making this a pivotal week for market positioning.