Nuclear Stocks Slump as Regulator Blocks Data Center Deal

Major U.S. equities indexes moved lower on Tuesday, the final market session before Election Day. Beyond the pivotal political developments, the trading week will include the Federal Reserve’s interest-rate announcement on Thursday and the latest stream of corporate earnings reports.

The S&P 500 closed 0.3% lower as voters prepared to head to the polls. The Nasdaq also fell 0.3%, while the Dow lost 0.6%.

Shares of power generator Constellation Energy (CEG) plunged 12.5%, the most of any S&P 500 stock, as a decision by the Federal Energy Regulatory Commission raised questions about the nuclear power industry. The regulatory agency reportedly rejected a deal between Amazon (AMZN) and nuclear generator Talen (TLN), citing a potential negative impact for nearby customers if Talen dedicates additional energy from its nuclear facility to power the e-commerce and cloud-computing giant’s data center. Similar regulatory scrutiny could fall on a deal signed by Constellation Energy last month that would see the company restart a shuttered nuclear unit in Pennsylvania to provide power for Microsoft (MSFT) data centers.

The headwinds facing nuclear generators also weighed on shares of New Jersey-based utility Public Service Enterprise Group (PEG), which sank 6.2%. In addition to the industry pressure, the company reported mixed results for the third quarter, falling short of profit expectations but exceeding top-line forecasts. Although the company benefitted from higher energy margins and tax credits, it now expects to exceed its initial full-year capital plan.

United Airlines (UAL) shares fell 4.0%, reversing some of the strong gains the carrier posted in October. While bullishness about the airline industry has centered on well-timed capacity reductions over the summer, an uptick in crude oil futures prices on Monday and the prospect of higher fuel costs may have contributed to the pressure on United stock.

Shares of fertilizer giant Mosaic (MOS) surged 5.4% on Monday, the top daily performance in the S&P 500, following reports that Belarusian President Alexander Lukashenko proposed cutting potash production levels in an effort to boost prices for the key crop nutrient. Any pricing improvement would be welcome news for Mosaic, which has warned that operational issues could restrain potash production and shipment volumes this quarter.

Sherwin-Williams (SHW) shares jumped 4.6% after news emerged that the paint maker’s stock will be included in the Dow Jones Industrial Average (DJIA), replacing chemical giant Dow Inc. (DOW) on the price-weighted index of 30 blue-chip companies, effective prior to the start of trading on Friday. S&P Dow Jones Indices also announced that AI chip behemoth Nvidia (NVDA) will replace Intel (INTC) on the DJIA. Inclusion in such a widely followed index can provide a boost to stock prices as index-tracking funds purchase shares.