Investing.com – Wall Street traded with slight gains on Monday as investors remained cautious ahead of this week’s monetary policy decision from the Federal Reserve (Fed) and the monthly jobs report while fresh uncertainty over the outcome of the U.S. presidential election weighed on market sentiment.
At 11:44AM ET (15:44GMT), the Dow Jones inched up 16 points, or 0.09%, the S&P 500 rose 6 points, or 0.26% while the tech-heavy Nasdaq Composite traded up 13 points, or 0.24%.
News that the Federal Bureau of Investigation (FBI) had obtained a warrant to examine another round of Democratic candidate Hillary Clinton’s e-mails just a week before the November 8 elections rattled markets.
Clinton’s lead in opinion polls over Republican presidential nominee Donald Trump narrowed after the news release, increasing uncertainty over the eventual outcome and forcing markets to be wary over what type of economic policies Trump would move forward with in the case of a victory.
Market participants were also cautious ahead of two key events on this week’s calendar.
The U.S. central bank holds its next two-day monetary policy meeting on November 1 and 2 with markets currently pricing in the odds of a rate hike at just 7.2%, according to Investing.com’s Fed Rate Monitor Tool.
Analysts widely believe that the U.S. central bank will hold off on making a move this Wednesday due to the fact that the presidential elections take place shortly afterwards on November 8.
Fed fund futures currently place the probability of a move at the following meeting in December at 73.6%.
Besides the Fed decision, market participants were also waiting for the October employment report to be released on Friday.
The consensus forecast is that the data will show jobs growth of 175,000, following an increase of 156,000 in September, the unemployment rate is forecast to dip to 4.9% from 5.0%, while average hourly earnings are expected to rise 0.3% after gaining 0.2% a month earlier.
An upbeat employment report will point to an improving economy and support the case for higher interest rates in the coming months, while a weak report would add to uncertainty over the economic outlook and push prospects of tighter monetary policy further off the table.
Macro data on Monday was mixed with personal spending and, the Fed’s favorite inflation gauge, the core PCE price index, coming out in line with forecasts for September. However personal income rose slightly less than expected while the increase in real personal consumption came out just above consensus.
The Chicago purchasing managers’ index (PMI) caused worry as it fell more than expected to a five-month low. The reading of 50.6 was close to the dividing line between expansion and contraction.
On the company front, GE(NYSE:GE) and Baker Hughes (NYSE:BHI) confirmed an agreement to merge oil and gas operations. The Dow component will own 62.5% of the new company with shareholders of the oil services provider owning 37.5% and receiving a one-time cash dividend of $17.50 per share once the deal closes, presumable in mid-2017.
Also in corporate movements, CenturyLink (NYSE:CTL) announced it would pick up Level 3 Communications Inc (NYSE:LVLT) in a cash and stock deal worth about $24 billion.
Additionally, investors were continuing to parse through a slew of corporate earnings.
According to FactSet, the earnings growth rate for the S&P 500 is 1.6%, which is above the year-over-year blended decline of -0.5% at the end of last week and the year-over-year estimated decline of -2.2% at the end of the third quarter.
If the benchmark manages growth in earnings for the quarter, it will mark the first time the index has seen year-over-year growth in earnings since the first quarter of 2015 (0.5%).
Meanwhile, oil prices were sharply lower on Monday as hopes for a deal among major oil producers to curb output began to fade.
On Friday, OPEC members failed to agree on how to put in place a global deal to limit production, following objections from Iran which has been reluctant to even freeze its output, sources said.
On Saturday, non-OPEC producers made no specific commitment on Saturday to join OPEC in limiting oil output levels to prop up prices, suggesting they wanted the oil cartel to solve its own differences first.
U.S. crude futures lost 2.61% to $47.43 by 11:52AM ET (15:52GMT), while Brent oil traded down 2.88% to $49.22.