Investing.com Weekly Market Overview

It’s set to be another nail-biting week for investors as U.S. voters go to the polls in a too close to call presidential election race that will have far-reaching consequences for fiscal policy and global trade. Meanwhile, the Federal Reserve is expected to deliver another rate cut at its latest policy meeting, with investors on the lookout for clues on the future path of interest rates. Here's your look at what's happening in markets for the week ahead.

1. U.S Election

Election day is on Tuesday with early voting already well underway in a tight race for the White House, pitching Republican Donald Trump against Democrat Kamala Harris.

Recent gains in Treasury yields and the dollar are seen by some analysts as the market anticipating a win for Trump. However, polls suggest a very close race, meaning that a victory for Harris could spark a rash of trading unwinds.

Traders may be rooting for a clear result, fearing a potentially contested election and lengthy period of uncertainty as a significant risk to markets.

Only seven states are viewed as truly competitive, but a poll released on Saturday showed Harris holding a surprise lead in Iowa, a state Trump won easily in the last two elections, although another poll showed her trailing there.

2. Fed Meeting

The Fed is widely expected to deliver a 25-basis point rate cut at the conclusion of its latest policy meeting on Thursday, followed by another in December, after September’s 50-bps reduction.

Friday’s nonfarm payrolls report showed that job growth almost stalled in October amid strikes and weather disruptions, indicating expectations for a smaller rate cut. Jobs growth for the prior two months was revised lower, suggesting the labor market is gradually cooling.

Investors will be hoping the Fed's statement and comments by Fed Chair Jerome Powell at the post-policy meeting press conference will indicate whether officials believe economic resilience will continue, and if they might cut rates more slowly as a result.

Morgan Stanley analysts noted they don’t expect Powell to commit to the size or cadence of future cuts but to reiterate that the Fed remains data-dependent.

3. Earnings Season

Third quarter earnings season continues, with several results due in the coming days, although investors will likely focus on the election and the Fed.

Palantir (NYSE:PLTR) and Constellation Energy (NASDAQ:CEG) are due to report on Monday, followed a day later by Builders FirstSource Inc (NYSE:BLDR), Ferrari (NYSE:RACE), and Super Micro Computer (NASDAQ:SMCI). SMCI shares lost almost 45% last week after a regulatory filing revealed that Ernst & Young resigned as the company's accountant.

Qualcomm (NASDAQ:QCOM), CVS (NYSE:CVS), and Arm Holdings (NASDAQ:ARM) are due to report on Wednesday, with investors looking for updates from Arm regarding its lawsuit against Qualcomm.

Pinterest (NYSE:PINS), DraftKings (NASDAQ:DKNG), Cloudflare (NYSE:NET), and Affirm (NASDAQ:AFRM) are among others reporting on Thursday.

4. Bank of England Rate Cut

The Bank of England meets on Thursday and is widely expected to lower rates by 25 bps after cutting rates for the first time in over four years in August. The policy decision could draw extra attention following the Labour government's new budget.

Investors anticipate fewer BoE interest rate cuts next year, as plans for higher borrowing and spending in last Wednesday’s budget saw UK borrowing costs rise to their highest levels in a year.

Elsewhere, the Reserve Bank of Australia is expected to keep its key interest rate unchanged on Tuesday and for the rest of the year, as strong economic activity and persistent core inflation warrant a cautious approach.

5. Oil Prices

Oil prices look set to remain volatile as geopolitical risks offset concerns over rising supply and a weaker demand outlook.

Oil prices rose on Friday amid reports that Iran is preparing a retaliatory strike on Israel to be launched from Iraq within days. Iran and Israel have engaged in a series of tit-for-tat attacks amid broader Middle Eastern conflicts triggered by Gaza fighting.

Prices were also supported by expectations that OPEC+ may delay December's planned increase to oil production due to concerns over soft oil demand and rising supply. A decision may be made as early as this week.

For the week, Brent posted a decline of about 4%, while U.S. crude futures fell about 3% due to record U.S. output weighing on prices.

–Reuters contributed reporting