Global equity markets have wobbled this week with investors eyeing the outcome of the US midterm elections, while oil prices continued their descent amid ongoing talks to end the Middle East conflict.
On Wall Street, the benchmark S&P 500 and the Nasdaq were advancing, led by gains in industrials, technology and communication services stocks, while consumer staples and materials shares were driving losses. The Dow was also lower.
The Dow Jones Industrial Average .DJI fell 0.43 percent, the S&P 500 .SPX rose 0.28 percent, and the Nasdaq Composite .IXIC gained 0.66 percent.
The pan-European STOXX 600 .STOXX index fell 0.58 percent. MSCI’s gauge of stocks across the globe .MIWD00000PUS fell 0.16 percent.
“Over the past three weeks, there’s basically been three primary events that the market has been factoring in and trying to see what the results would be: the first one was the Fed meeting last week; the second one was the earnings season; and today we’re getting the third one, which is the midterm elections,” said Wasif Latif, chief investment officer at Sarmaya Partners.
“The Fed meeting was pretty much a non-event; the earnings season has been good overall although it’s been rough for some of the hyperscalers because high interest rate is beginning to have an impact on the market’s appetite for more debt spending.
“As for the elections, we know the polls are predicting a strong showing for the Democrat side but the market might not yet be appreciating a potential pushback on data centres.”
Israel aid cut
US President Donald Trump announced he had agreed to stop $4 billion in funding to Israel at the end of the year.
He said Israel no longer needed the funding and that some Democrats and left-wing politicians were using the US financial support to Israel as a talking point to criticize Republicans. He had made a deal with Israeli Prime Minister Benjamin Netanyahu to stop the aid, he said in an interview on Fox News.
The comments sent oil prices lower. Brent crude futures LCOc1 fell 1.12 percent to $103.60 a barrel.
The US and Iran are still far from a deal to end their war, a senior Iranian official told Reuters on Tuesday. Overnight, the US carried out “defensive” strikes on Iran’s Qeshm Island targeting surface-to-air missiles used against US assets, a US official said.
In currencies, the dollar edged higher against major peers including the Japanese yen and Swiss franc. It was up 0.51 percent at 158.72 against the yen JPY= and rose 0.27 percent to 0.821 against the franc CHF=.
The euro EUR= was up 0.03 percent against the dollar at $1.11908.
The dollar index =USD, which measures the currency against a basket of peers, was flat at 101.85. It hit a one-month low on Monday.
The Chinese yuan weakened against the US dollar after the People’s Bank of China said it would raise the foreign exchange reserve ratio, a move aimed at putting the brakes on a long rally in the yuan. The yuan CNH= weakened 0.33 percent against the greenback to 6.67 per dollar.
In the bond market, the yield on government securities rose in the US and Europe. The yield on the US 10-year Treasury note US10YT=RR rose 5.36 basis points to 4.948 percent.
The yield on the benchmark German 10-year Bund DE10YT=RR rose 1.89 basis points to 3.33 percent.
Cryptocurrencies stabilised after last week’s Binance hack. Bitcoin BTC= gained 1.17 percent to $77,631.79.
In the commodity market, prices of gold and silver fell. Spot gold XAU= fell 0.67 percent to $3,920.81 an ounce while spot silver XAG= fell 2.23 percent to $49.50 an ounce.
Chibuike Oguh, Reuters
