Stocks struggled to maintain stability on Monday as investors prepared for the U.S. presidential election and an anticipated Federal Reserve rate cut later this week. The Dow Jones Industrial Average fell by 258 points (approximately 0.6%), while both the S&P 500 and Nasdaq Composite declined about 0.3%. The Dow briefly dropped over 400 points during the session, with the S&P 500 and Nasdaq fluctuating between gains and losses.

Upcoming election results are expected to significantly influence market trends as polls indicate a tight race between former President Donald Trump and Vice President Kamala Harris. Investors are trying to gauge the potential implications of a divided Congress on future legislative changes. Meanwhile, the market is also bracing for the Federal Reserve’s decision on interest rates on Thursday, with traders estimating a 98% probability of a quarter-point cut.

In the lead-up to the election, safe-haven U.S. Treasurys rallied, with the benchmark 10-year Treasury yield dropping to approximately 4.31%. The overall market sentiment reflects caution amid heightened volatility, with options markets indicating a defensive stance among investors. As equity markets prepare for significant events this week, analysts anticipate the S&P 500 may see positive returns following Election Day, historically reflecting an upward trend in years past.