Inventory futures are flat as England stays at house within the US as a result of uncertainty within the US election
A man walks near the New York Stock Exchange (NYSE) on Wall Street on August 31, 2020 in New York City.
Angela Weiss | AFP | Getty Images
Stock futures were flat overnight on Sunday as the market tried to rebound from its worst week since March.
The move came as England passed a stay-at-home order and traders were preparing for Tuesday's U.S. presidential election, where a controversial presidential or Senate battle could delay a much-needed fiscal stimulus to the U.S. economy.
The futures on the Dow Jones Industrial Average fell 20 points. S&P 500 futures and Nasdaq 100 futures have hardly changed.
Prime Minister Boris Johnson announced that England will close all non-essential businesses for the next four weeks on Saturday after more than 22,600 weekly Covid-19 cases were reported for the UK, well above its first high of 4,800 average weekly cases in the spring lies. People are being told to stay home unless it is for essential purposes, Johnson said.
The US is also grappling with a surge in new coronavirus infections. According to Johns Hopkins University, the nation reported 99,321 new Covid-19 cases on Friday, beating its previous record set just the day before. The top five records in daily cases were all reported within the last eight days.
Ahead of Tuesday's election, Joe Biden has a significant national lead over President Donald Trump. According to a poll by NBC News / Wall Street Journal on Sunday, the former vice president received 52% of support from registered voters versus 42% for the president.
The Senate elections could also be crucial for the markets, as many important policy changes, including other fiscal incentives, depend on who has majority control.
"The world is still largely on hold as investors wait for clarity in the US election," said Adam Crisafulli, founder of Vital Knowledge, in a note on Sunday. "The world will likely be a lot clearer in a few days as the elections are over, business talks resume in Washington, and the central bank continues to receive support."
The blue-chip Dow closed October with a loss of 4.6%, marking its worst monthly performance since March. The S&P 500 and Nasdaq fell 2.8% and 2.3% respectively last month, both suffering their second consecutive negative month.
Key averages have seen their worst week since March 20, when coronavirus cases spiked, fiscal stimulus negotiations fell apart, and stocks of megacap tech companies like Apple and Amazon plummeted following their quarterly earnings reports.
Volatility hit a four-month high during last week's share price. The Cboe Volatility Index (VIX), also known as the "fear measure" of the market, briefly jumped above 40.
Some on Wall Street believe the pre-election day sell-off offers the market less downside risk for a controversial outcome.
"While we worry that there might be another downward wave if we get another big influx of uncertainty, we think the stock market is now preparing well for good net advance in the next two months" said Matt Maley, chief marketing strategist at Miller Tobacco, said in a note on Sunday.
Elections aside, investors face other important events later this week, including a Federal Reserve meeting and October's employment report.
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