U.S. Index Futures Signal Stocks to Decline After Four-Day Rally

U.S. stock index futures slipped, indicating stocks may trim their best weekly gain since April, while Democrat Joe Biden tightened his hold on the race for the presidency.

December contracts on the S&P 500 Index were down 1.1% as of 10:22 a.m. in London, ahead of a monthly payrolls report. Futures on the Dow Jones Industrial Average declined 0.8% while those on the Nasdaq 100 Index slid 1.2%.

Investors heading into a weekend of election updates are assessing the extent of gains after stocks rebounded strongly from a slump in October. Biden overtook Donald Trump in the crucial swing state of Georgia, while legal complaints mounted from Trump’s campaign.

U.S. Index Futures Signal Stocks to Decline After Four-Day Rally

“The most probable outcome still looks like a Democrat win with Joe Biden winning the Presidency, however nagging doubts remain that the eventual outcome may well end up in the US courts,” said Michael Hewson, chief market analyst at CMC Markets. “For now, financial markets don’t appear too concerned about this, however it would still seem prudent to take some money off the table as we head into the weekend, and today’s US payrolls report.”

The October payrolls report will offer further clues about the health of the U.S. economy amid the pandemic, with economists expecting fewer jobs added than in September.

Federal Reserve officials on Thursday kept interest rates near zero while Chair Jerome Powell opened the door to a possible shift in the central bank’s bond purchases in coming months.

©2020 Bloomberg L.P.

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