Wall Street is drifting ahead of Election Day and a manic week for markets

NEW YORK – U.S. stocks sank on Monday ahead of a momentous week full of potential trouble spots in Washington, DC and around the world.

The Standard & Poor's 500 index slipped 0.3% but is still close to its record high set last month. The Dow Jones Industrial Average fell 0.6%, while the Nasdaq Composite fell 0.3%.

Intel fell 2.9% and chemicals producer Dow fell 2.1% in its first trading since it announced it would no longer be included in the Dow. Warren Buffett's Berkshire Hathaway fell 2.2% and was one of the heaviest weights in the market after the company reported a decline in operating profit last quarter.

But the majority of stocks in the S&P 500 rose, including a 2.8% gain for Fox after the company reported a stronger-than-expected profit. This happened despite increased costs, including for news gathering at Fox News to cover this election cycle.

Election Day takes place on Tuesday, but the result may not be known for some time as officials count all the votes. That has raised fears about the possibility of sharp swings around the world because markets hate uncertainty.

The story may be less threatening. The broad US stock market has historically continued to rise, regardless of which party wins the White House. And in 2020, U.S. stocks rose immediately after Election Day and continued their course even after former President Trump refused to concede and questioned the results, creating much uncertainty. Much of that rally was driven by excitement over the potential of a vaccine against COVID-19, which had just brought the global economy to a standstill.

“Bottom line: The U.S. election is incredibly important, but the process will likely be incredibly noisy,” said Michael Zezas, a strategist at Morgan Stanley.

As for the markets, Zezas also points out that prices may have moved faster than expected election results. For example, a Trump victory in this election could mean U.S. tariffs on Mexican imports, which could hurt the value of the Mexican peso. However, the peso has fallen against the US dollar in recent months, which could limit further moves in the event of a Trump victory.

A Trump victory this time would be less of a surprise to markets than in 2016, when Treasury yields surged on expectations of tax cuts that could further drive up the country's debt or spur a stronger U.S. economy soared. Treasury yields have risen in recent weeks, driven in part by rising expectations in some segments of the market for a Trump victory, along with a flood of data showing the U.S. economy has remained stronger than feared.

On Monday, Treasury yields gave back some of those gains. The yield on the 10-year Treasury note fell to 4.29% from 4.38% late Friday.

Another investment that has become a market barometer of Trump's perceived chances of victory fluctuated wildly throughout the day. After fluctuating between losses and gains throughout the morning, Trump Media & Technology Group's stock ultimately rose 12.4%.

Shares of the company behind Trump's Truth Social platform had risen sharply from a low point in September until hitting the wall last week, falling at least 11% in three straight days.

In the oil market, the price of a barrel of US crude rose 2.8% to $71.03 after Saudi Arabia and other oil producers said they would postpone plans to increase the amount of crude they produce. Brent crude, the international standard, rose 2.7% to $75.08 a barrel.

The price of Brent is still falling this year, partly due to concerns about demand from China amid economic challenges.

China's National People's Congress Standing Committee is meeting this week, and analysts expect the government may approve major spending initiatives to boost economic growth given problems in the country's real estate industry.

Beyond this meeting and Election Day in the United States, this week will also be the Federal Reserve's final meeting, and the general expectation is that it will cut its key interest rate for the second day in a row.

The hope driving U.S. stock indexes to record highs of late is that the U.S. economy can remain resilient and avoid a long-feared recession, in part because of impending interest rate cuts expected by the Fed.

On Wall Street, Nvidia rose 0.5% and Sherwin-Williams rose 4.6% after announcing they would replace Intel and chemical company Dow's parent company Dow in the Dow.

Nuclear power industry stocks fell after U.S. regulators rejected a request to send more electricity from a Pennsylvania nuclear plant operated by Talen Energy to an Amazon data center. Companies across the energy industry have struck deals with data center operators to meet their growing needs for more power, and Talen fell 2.2%.

Overall, the S&P 500 fell 16.11 points to 5,712.69. The Dow fell 257.59 points to 41,794.60 and the Nasdaq Composite lost 59.93 points to 18,179.98.

In overseas stock markets, indices were mostly lower in Europe after rising in much of Asia.

Choe writes for the Associated Press. AP Author Elaine Kurtenbach contributed to this report.