Wall Street wavers, Treasury yields dip as election day rolls on By Reuters
By Stephen Culp
NEW YORK (Reuters) – U.S. stocks gyrated and Treasury yields paused on Tuesday as Americans went to the polls and market participants bided their time waiting to see whether Capitol Hill is in for a power shift.
An early rally gathered momentum early in the session but lost steam into the afternoon, with the dipping into red and back again.
Meanwhile, gold prices surged against the weakening dollar.
“Gold is your worry safe haven, but if there’s any worry in the marketplace it might be short,” said Joseph Sroka, chief investment officer at NovaPoint in Atlanta. “The biggest concern around the election is we may not know the results today.”
The result of the U.S. midterm election will decide whether Democrats lose or retain congressional control halfway through President Joe Biden’s first term, raising the possibility of legislative gridlock.
“There’s some optimism around the potential for a divided government, with the democrats controlling the White House and the republicans potentially ready to take control of one or both chambers of congress,” Sroka added.
“A more conservative fiscal policy which could be enacted by Republican-controlled congress would put less inflationary pressure on the economy and that would make the Fed’s job easier,” he said, adding that gridlocks in Washington have historically been positive for equity markets.
Inflation remains a top concern among voters and the Federal Reserve, and market participants – with third quarter reporting season now largely in the books – are also awaiting crucial consumer price data on Thursday.
The rose 243.99 points, or 0.74%, to 33,070.99, the S&P 500 gained 9.97 points, or 0.26%, to 3,816.77 and the dropped 2.66 points, or 0.03%, to 10,561.86.
European stocks closed at their highest level in eight weeks as investors bet on a market-friendly outcome of the U.S. election.
The pan-European index rose 0.78% and MSCI’s gauge of stocks across the globe gained 0.56%.
Emerging market stocks rose 0.43%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.64% higher, while rose 1.25%.
Treasury yields moved lower, held in check ahead of midterm election results and upcoming inflation data.
Benchmark 10-year notes last rose 20/32 in price to yield 4.1297%, from 4.214% late on Monday.
The 30-year bond last rose 23/32 in price to yield 4.2639%, from 4.313% late on Monday.
The dollar lost ground against a basket of world currencies as the prospect of Republican gains boosted investor sentiment and weighed on the safe-haven currency.
The fell 0.37%, with the euro up 0.47% to $1.0066.
The Japanese yen strengthened 0.72% versus the greenback at 145.60 per dollar, while Sterling was last trading at $1.1532, up 0.18% on the day.
Crude prices slid amid worsening COVID-19 outbreaks in China, raising concerns over softening demand and possible recession.
fell 3.14% to settle at $88.91 per barrel, while was last at $95.40, down 2.57% on the day.
Gold surged past the key $1,700 per ounce level, touching its highest price in a month as the safe-haven metal moved in opposition to the dollar.
added 2.2% to $1,710.78 an ounce.
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