US Election Uncertainty Weighs on Global Markets, Asia Rallies

World stock markets were mixed on Tuesday as investors braced for a week packed with pivotal events, most crucially the U.S. presidential election and a Federal Reserve meeting.
Uncertainty over election results, which may take days to finalize, added to market jitters, while hopes for a rate cut from the Fed provided a counterbalance.
Major Asian indexes saw strong gains, fueled by optimism that China would roll out stimulus measures to support its slowing economy. China’s Shanghai Composite surged 2.3 percent, and Hong Kong’s Hang Seng climbed 2.1 percent as investors anticipated stimulus policies from Beijing, including potential debt restructuring for local governments.
Japan’s Nikkei 225 rose 1.1 percent after reopening postholiday, while South Korea’s Kospi dropped 0.4 percent amid regional tensions. North Korea’s launch of ballistic missiles ahead of the U.S. election raised concerns, although it did not significantly impact broader market sentiment.
European markets opened with modest losses as the DAX in Germany slipped 0.1 percent and France’s CAC 40 edged down 0.2 percent, reflecting cautious sentiment.
The FTSE 100 in the U.K. was also down 0.1 percent. Meanwhile, U.S. futures for the S & P 500 and Dow Jones Industrial Average ticked up 0.1 percent, showing muted optimism as investors waited for election results and the Federal Reserve’s rate decision.
In the U.S., the S & P 500 fell 0.3 percent on Monday, and the Dow Jones and Nasdaq each slipped amid ongoing concerns about recession risks. Despite the uncertainty, the broad U.S. stock market has shown resilience in election years, historically rising regardless of which party wins.
Oil prices rose on Tuesday, with U.S. crude up 27 cents to $71.74 per barrel and Brent crude adding 23 cents to reach $75.31. Monday saw sharp gains after Saudi Arabia and other producers announced they would delay plans to increase output, a move aimed at stabilizing prices amid global demand concerns.
Brent prices have struggled this year, weighed down by doubts over demand from China while it grapples with economic challenges. However, the recent uptick offers some hope for recovery, even while global energy markets remain volatile.
In currency trading, the dollar strengthened to 152.36 yen, while the euro gained slightly to $1.0886. Investors are watching the Fed, widely expected to cut its key interest rate again this week, with the aim of supporting the U.S. economy amid concerns about a potential downturn.
Recent market optimism stems from hopes that rate cuts can stave off recession fears, even while the U.S. economy faces pressures from higher interest rates and a potential slowdown.
Markets are mindful of past election cycles, noting that U.S. stocks rallied after Election Day in 2020, despite uncertainty over the final result. Analysts believe a repeat Trump victory would be less of a shock than in 2016, when markets soared on expectations of tax cuts and economic stimulus.
As investors brace for an eventful week, attention remains focused on how the U.S. election, Fed decisions, and potential Chinese stimulus measures could shape the trajectory of global markets.
This article contains additional reporting from The Associated Press