Stocks struggled to hold their ground on Monday as investors geared up for the U.S. presidential election and a potential Federal Reserve rate cut later this week.

The Dow Jones Industrial Average slumped 258 points, or about 0.6%. The S&P 500 and the Nasdaq Composite each dropped about 0.3%. The Dow at one point slumped more than 400 points, while the S&P 500 and Nasdaq shuffled between gains and losses throughout the day.

Tuesday's election results could play a pivotal role in where stocks finish off the year. The latest poll from NBC News shows a "deadlocked race" between former President Donald Trump and Vice President Kamala Harris.

Lauren Goodwin, economist and chief market strategist at New York Life Investments, said investors appear to be trying to price in the relatively small changes in the perception of who is likely to win the election.

"This election is too close to call. Neither I nor anyone else has any real edge on what's likely to happen. So that makes the market's moves kind of binary," Goodwin said.

Any market aftershocks may depend on which party takes control of Congress. Major legislative changes would be difficult to pass if control of the U.S. House of Representatives and Senate is divided. A Republican or Democratic sweep, however, would likely be coupled with a White House victory for the same party, and could mean ambitious spending plans or a tax overhaul.

A small rally for Nvidia helped stabilize the market on Monday. Shares were up 2% after S&P Dow Jones Indices announced late Friday that the chipmaker would replace rival Intel in the 30-stock Dow. The change, which takes effect at the end of the week, comes as Nvidia continues to rip higher while Intel languishes in the artificial intelligence race.

Nvidia is up 180% year to date, while Intel has lost more than half of its value in 2024.

Elsewhere, utility stocks weighed on the market after federal regulators rejected a Talen Energy request to increase nuclear power at a plant in Pennsylvania to provide more electricity for an Amazon data center. Stocks tied to fossil fuels and solar power both rose, however, and oil climbed 2%.

Along with the election, Wall Street is also bracing for the latest rate decision from the Federal Reserve on Thursday. Traders are pricing in a 98% likelihood of a quarter point rate cut at the conclusion of the central bank's policy meeting, according to CME Group's FedWatch tool. That would follow a half peecentage point reduction by the central bank in September.

The moves in stocks Monday came as safe-haven U.S. Treasurys rallied, suggesting that some investors may be reducing risk ahead of election day. The benchmark 10-year Treasury was trading at a yield of about 4.31% on Monday, down from roughly 4.36% on Friday. Yields on bonds move in the opposite direction from their price.

— CNBC's Sarah Min contributed reporting