US open: Stocks slump as Trump leads polls, Fed policy decision looms

US markets slumped as a recent poll put Donald Trump ahead in the race for the White House, while the Federal Reserve is expected to hold out on raising interest rates at the central bank’s meeting on Wednesday.

The Dow Jones Industrial Average fell 0.18% to 18,005.29 points, S&P 500 declined 0.35% to 2,104.26 points and the Nasdaq plunged 0.34% to 5,135.88 points at 1502 GMT.

Oil prices retreated as doubts spread over producers cutting output and as the Energy Information Administration said US crude oil inventories rose 14.4m barrels last week.

Brent crude was down 2.88% to $46.79 per barrel and West Texas Intermediate weakened by 3.09% to $45.79 at 1443 GMT.

A poll released late on Tuesday by ABC News/Washington Post showed Republican nominee Donald Trump taking a one-point lead over Democrat Hillary Clinton.

Naeem Aslam, chief market analyst at Think Markets, said: “What is overshadowing the markets right now is surprise news that Trump has lead in the polls once again and this race for the presidency is going to be tight. Investors have abandoned the ship when it comes to the equity market and it is more about the safe haven trade. Hence we are seeing the volatility index moving higher and precious metal.

“In the short term, we are expecting markets to continue their downward trend and things could be a lot more vile if Trump becomes the president as stock markets have already shown who they want in office.”

He said minutes from the Fed meeting will show whether it will raise interest rates in December, while economic data may not be as important as the central bank could be more focused on the outcome of the election.

The latest policy decision by the Fed is expected at 1800 GMT.

Meanwhile, data from ADP found that private sector employment rose less than expected in October.

Employers added 147,000 jobs last month, missing expectations for a 165,000 increase. Meanwhile, the September figure was revised up to show 202,000 jobs were added, compared to a previous estimate of 154,000.

The report comes ahead of the highly-anticipated non-farm payrolls report on Friday.

In corporate news, shares in electric and driverless carmaker Tesla fell 0.79% after chief executive Elon Musk made a sales pitch on Tuesday for the SolarCity Corp purchase.

Shares slumped 0.6% even though the Alibaba as the Chinese e-commerce giant beats expectations as it reported a 55% rise in second quarter revenue to 34.3bn yuan ($5bn), ahead of the 33.9bn yuan forecast.

Beauty manufacturer Estée Lauder shares declined 3.48% as it also beat quarterly estimates as it earned 84 cents per share, more than the consensus forecast of 80 cents. Revenue rose slightly by 1.05% to $2.87bn.

Shares decreased 0.29% as Time Warner, which AT&T said in October it would buy, reported that revenue rose 6.7% to $3.4bn.

Facebook and Whole Foods will post their quarterly earnings after markets close.