US Stock Market Overview – Stocks Close Mixed; Ahead of US Election

US stocks closed on Monday ahead of Tuesday’s General Election. The market appears to be pricing in a Biden victory and is not set up for a prolonged contested election. The polls have been tightening in some battleground states but the national numbers show Biden ahead by a robust 10-points. All sectors in the S&P 500 index were higher, led up by Energy, Technology shares lagged. Manufacturing expanded at a greater than expected pace according to the Institute of Supply management. Construction spending rose less than expected in September according to the US Commerce Department. The VIX volatility index eased slightly but remains above 37 which is an elevated level. The US dollar continued to rise while oil prices rebounded closing higher after dropping 3% during the session.

ISM Manufacturing Rises More than Expected

US manufacturing increased according to ISM rising to a 2-year high of 59.3 compared to expectations that the index would come in at 55.8. This compares to a September reading of 55.4. Gains were driven by a surge in new orders which jumped to a 17-year high according to ISM. ISM’s manufacturing employment gauge rose to a reading of 53.2 from 49.6 in September.

Construction Spending Rose Less than Expected

Construction spending rose 0.3% in September to an annual rate of $1.41 trillion, according to the Commerce Department. Expectations were for a 0.9% increase. Spending in August was revised to an 0.8% rise from the prior estimate of a 1.4% gain. Residential construction rose 2.7% in September. Spending on public construction projects fell 1.7% and non-residential construction fell 1.6%.