Stocks were quiet last week -- until Thursday, the last day of October, when it felt like the major indices fell through a trapdoor. The S&P 500 (SPX) dropped 1.9%, the Nasdaq plunged 2.8%, and the Nasdaq 100 (QQQ) slid 2.5%. Those were the largest one-day losses since early September. October logged the first monthly decline for the SPX since April and the first Nasdaq and QQQ monthly loss since July. While the majors didn't break any key chart support levels or important intermediate-term averages last Thursday, price action did trigger some bearish short-term alerts. The SPX fell right to its 50-day and bounced, but the size of the decline turned the 5-day/13-day exponential moving average (EMA) crossover bearish for the first time since early September. The 14-day Relative Strength Index (RSI) broke its uptrend off the lows since early August and lost the 50 level. The 21-day Rate-of-Change (ROC) was close to turning negative. The daily Vortex Indicator went to a sell. Volume was heavy on all indices (creating a distribution day). Finally, the SPX gapped down out of a bearish wedge pattern. The key area that needs to hold for the SPX is 5,650 (breakout level) to 5,677 (recent low). Below that range, a ton of downside targets come into play between 5,400 and 5,590. The QQQs also gapped down and out of a bearish wedge and have seen multiple distribution days over the past eight days. There was a bearish 5/13 EMA crossover and the ETF is just six points above its 50-day moving average. If the 50-day (at 481.60) is lost, there is a support zone between 450 and 475 that includes the 21-week EMA at 475, the 200-day at 458, and some retracement levels. (Mark Arbeter, CMT)

The U.S. presidential election is just days away. Which candidate is better for the stock market? Surprisingly, we don't think it matters that much. This theory is backed up by historical data. Our review of presidential cycles reveals that the primary driver of stock success is market fundamentals - how well the economy is doing, if inflation is maintained at the low 2%-3% levels, if the labor market remains strong and unemployment doesn't creep up, and if interest rates are lower. This is the best case for stocks and outweighs whoever is in the White House. That said, there are some nuances and implications for individual sectors. For our list this week and next, we look at several sectors and how they might be impacted by America's choice for the next president. Below, we look at the Industrial and Financial sectors and how they might perform under either candidate.

Morgan Stanley is a global investment bank whose history, through its legacy firms, can be traced back to 1924. The company has institutional securities, wealth management, and investment management segments with approximately 45% of net revenue from its institutional securities business, 45% from wealth management, and 10% from investment management. About 30% of its total revenue is from outside the Americas. The company had over $5 trillion of client assets as well as around 80,000 employees at the end of 2023.

Morgan Stanley is a diversified global financial securities firm. Its businesses include institutional securities sales and trading, investment banking, retail securities brokerage, and institutional asset management. Mitsubishi UFJ Financial Group, one of the largest banks in the world, owns about 23% of Morgan Stanley, and the two companies continue to expand their partnership.