U.S. stocks closed slightly lower after a choppy session Monday, as investors prepared for a crucial week in which Americans will elect a new president and the Federal Reserve will announce its policy statement.

Presidential candidates Donald Trump and Kamala Harris both scrambled for an edge in the last full day of a race that polls show as extremely close. It could take days to determine the victor.

Some of the so-called "Trump trades" unwound after a recent poll showed Harris, the Democratic vice president, leading in Iowa, sparking a drop in the U.S. dollar, Treasury yields and bitcoin. Trump Media & Technology Group closed sharply higher, bouncing back from early losses of nearly 6%.

In light of the Iowa poll, Harris' odds against the Republican former president improved on several betting sites, which many market participants eye as election indicators.

"Since we're going to take until Thursday or so, at least, to figure out who won, unfortunately this is going to be a pretty volatile week," said Sam Stovall, chief investment strategist at CFRA Research in New York.

"Earnings are going well, the Fed is still likely to cut interest rates, the only true uncertainty is the election, and hopefully that will be finalized sooner rather than later so investors can go back to investing."

According to preliminary data, the S&P 500 lost 15.02 points, or 0.26%, to end at 5,713.78 points, while the Nasdaq Composite lost 56.99 points, or 0.31%, to 18,182.93. The Dow Jones Industrial Average fell 250.91 points, or 0.60%, to 41,801.28.

The benchmark 10-year Treasury note was last off about 5 basis points (bps), after initially dropping as much as 10 bps. Volatile trading was expected until the election is decided and investors are clearer on government policy. The 10-year yield had fallen for five straight months before surging more than 48 bps in October.

The Russell 2000 rose as falling yields supported small cap stocks, seen as more likely to benefit from lower rates.

CBOE's Volatility Index, also known as Wall Street's "Fear Gauge," ticked slightly below the 22 mark but remained above its long-term average of 19.46 and hovered close to a near-two month high hit last week of 23.42.

Investors were largely pricing in a Fed interest rate cut of 25 bps at its policy announcement on Thursday, with CME's FedWatch Tool showing markets pricing in a 98% chance of a cut, with only a 2% chance the central bank keeps rates steady.

The biggest gainer among the 11 major S&P sectors was energy , up about 2% as oil prices climbed after OPEC+ decided to delay plans for an output increase.

Chip heavyweight Nvidia advanced. On Friday, S&P Dow Jones Indices said the company would replace Intel in the Dow Jones Industrial Average. Intel shares slipped to weigh on the Dow.

Hotel operator Marriott International lost ground after cutting its 2024 profit forecast on weak domestic travel demand in the U.S. and China.

Constellation Energy was the worst performer on the S&P 500, tumbling after the Federal Energy Regulatory Commission on Friday rejected an agreement to increase the power capacity of an Amazon data center connected directly to Talen Energy's nuclear power plant in Pennsylvania. The decision weighed on the utilities sector, which fell more than 1%.