By Barbara Kollmeyer, MarketWatch
Federal Reserve decision due later, but taking a back seat to politics
U.S. stock futures fell Wednesday as investors, increasingly unsettled by the prospect of a tighter-than-expected presidential election, moved away from perceived riskier investments such as stocks and gravitated toward the traditional havens of gold and the Japanese yen.
Investors are also awaiting the outcome of the Federal Open Market Committee meeting, which concludes Wednesday, but that event appeared to be taking a back seat to U.S. politics.
Dow Jones Industrial Average futures slipped 54 points, or 0.3%, to 17,886, while S&P 500 futures fell 6 points, or 0.3%, to 2,097.75. Nasdaq-100 futures dropped 11.25 points, or 0.2%, to 4,746.25.
The softness for futures came after U.S. stocks finished at nearly four-month lows on Tuesday, falling after polls showed a tightening U.S. presidential race. In particular, a ABC News/Washington Post tracking poll showed Republican nominee Donald Trump taking a one-point lead over rival Hillary Clinton (http://www.marketwatch.com/story/trump-takes-one-point-lead-over-clinton-in-fresh-poll-more-on-trump-tax-avoidance-strategies-2016-11-01).
(http://www.marketwatch.com/story/trump-takes-one-point-lead-over-clinton-in-fresh-poll-more-on-trump-tax-avoidance-strategies-2016-11-01)"The post-Brexit vote market reaction is still fresh in investors' memory, and no one wants to be caught on the wrong side of the trade," Hussein Sayed, FXTM's chief market strategist, said in a note on Wednesday.
"It will only take another one or two polls showing a Trump lead to boost markets anxiety and thus a steep sell off in equity markets and high beta currencies," he added.
Global stocks tracked the weakness for Wall Street, keying off those political jitters. Most Asian markets suffered losses of more than 1%, with the exception of the Shanghai Composite index, which finished 0.6% lower.
The dollar was also under pressure (http://www.marketwatch.com/story/investors-turn-to-yen-dollar-rises-versus-mexican-peso-as-us-politics-rattle-2016-11-02), as investors sought refuge in the Japanese yen. The greenback strengthened against the Mexican peso , which tends to weaken on signs Trump's prospects are improving.
In another sign that investors are jittery, gold prices were climbing. The metal was up $9.70, or 0.8%, to $1,297.70 an ounce, holding above a one-month closing high marked on Tuesday.
Read: Chart shows investors less prepared forTrump win than they were for Brexit shock (http://www.marketwatch.com/story/are-stock-market-investors-complacent-about-a-clinton-election-victory-2016-10-31)
Fed decision day: The Federal Reserve will announce its decision on interest rates at 2 p.m. Eastern Time. Analysts generally expect the Fed will be unwilling to make any move on policy just days ahead of an increasingly uncertain U.S. election, but investors could see a strong statement about the central bank's intentions for a December move.
Read: Welcome to the Fed meeting, the only place in America where politics is not being discussed (http://www.marketwatch.com/story/welcome-to-the-fed-meeting-the-only-place-in-america-where-politics-is-not-being-discussed-2016-11-01)
(http://www.marketwatch.com/story/welcome-to-the-fed-meeting-the-only-place-in-america-where-politics-is-not-being-discussed-2016-11-01)Before that, Automatic Data Processing's gauge of private-sector employment in October will be released at 8:15 a.m. Eastern Time.
(http://www.marketwatch.com/story/throughout-this-unending-campaign-the-one-constant-a-so-so-economy-2016-11-01)Stocks to watch: Several companies are expected to report earnings ahead of the open. They include Alibaba Group Holding Ltd.(BABA) , Clorox Co.(CLX) , Estée Lauder Cos.(EL) , Office Depot Inc.(ODP) , Time Warner Inc.(TWX) , Kate Spade & Co.(KATE) , and New York Times Co.(NYT) .
Valeant Pharmaceuticals International Inc.(VRX.T) shares could be active. They soared more than 30% in late trade Tuesday on reports that the pharma company is in talks to divest its stomach-drug business (http://www.marketwatch.com/story/valeant-shares-jump-more-than-30-on-divestiture-talks-2016-11-01).
Electronic Arts Inc.(EA) posted better-than-expected results late Tuesday, but shares fell on a slightly weaker-than-expected outlook (http://www.marketwatch.com/story/electronic-arts-falls-despite-strong-results-from-fifa-17-2016-11-01).
Etsy Inc.(ETSY) shares seesawed in late trading after revenue beat Wall Street forecasts (http://www.marketwatch.com/story/etsy-shares-see-saw-after-company-misses-q3-revenue-expectations-2016-11-01).
Shares of Tesla Inc.(TSLA) could be in focus after Chief Executive Elon Musk made a sales pitch on Tuesday (http://www.marketwatch.com/story/elon-musk-tightens-screws-on-investors-in-tesla-solarcity-deal-2016-11-01) for his $2.6 billion SolarCity Corp. (SCTY) purchase.
Facebook Inc.(FB) and Whole Foods Market Inc.(WFM) are among the companies due to report after the close.
Read: Throughout this surprising election, the one constant -- a so-so economy (http://www.marketwatch.com/story/throughout-this-unending-campaign-the-one-constant-a-so-so-economy-2016-11-01)
Other markets: European stock markets traded lower, led by banks. Oil prices extended losses (http://www.marketwatch.com/story/oil-prices-retreat-on-expectations-for-a-big-jump-in-us-supply-2016-11-02) on expectations that U.S. crude supply saw a big jump last week.
(END) Dow Jones Newswires
November 02, 2016 06:01 ET (10:01 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.